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a. If bonds of similar risk are currently earning a rate of return of 7%, how much should the Complex Systems bond sell for today?
a. If bonds of similar risk are currently earning a rate of return of 7%, how much should the Complex Systems bond sell for today? b. Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond c. If the required return is 15% instead, what would the current value of Complex Systems' bond be? Contrast this finding with your findings in part a and discuss a. If bonds of similar risk are currently earning a rate of return of 7%, the Complex Systems bond should sell today for C. Since Complex Systems" bonds were issued, there may have been a change in the number of bonds available or a change in the coupon interest rate. c. If the required return were at 15% instead of 7%, the current value of Complex Systems' bond would be : When the required return is equal to the coupon rate, the bond value is the par value. In contrast in part a above, if the required return is less than the coupon rate, the bond will sell at a (its value will be greater than par). (Select the best answers from the drop-down menus.)
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