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A man is considering buying a 20 year corporate bond. The bond has face value of 1,000 and pays 6% interest per year in two
A man is considering buying a 20 year corporate bond. The bond has face value of 1,000 and pays 6% interest per year in two semi-annual payments and in addition he will receive 1,000 at the end of 20 years, along with the last interest payment. If the investor believes he should receive 8% annual interest, compounded semi-annually, what will be the amount he is willing to pay for the bond? (Ans. P802.07)
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