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A company issued 10-year bonds three years ago with a coupon of 7 percent. If the current market rate is 8 percent and the bonds

A company issued 10-year bonds three years ago with a coupon of 7 percent. If the current market rate is 8 percent and the bonds make annual coupon payments, what is the current market value of one of these bonds? what is the current market value of one of these bonds if it was a zero-coupon rate? (2.5 Marks)

from Parrino, R., Kidwell, D. S., & Bates, T. (2012). Fundamentals of Corporate Finance, 2nd edition. John Wiley & Sons.

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