Question
Bank of America has bonds that pay a coupon interest rate of 4 percent and mature in 30 years. If an investor has a required
Bank of America has bonds that pay a coupon interest rate of 4 percent and mature in 30 years. If an investor has a required rate of return of 7.2 percent, what should she be willing to pay for the bond? What happens if she pays more or less? a. The price she would be willing to pay for the bond is $ nothing. (Round to the nearest cent.) b. The Bank of America bond is not an acceptable investment if she pays more less for the bond because the expected rate of return for the bond is less greater than her required rate of return.(Select from the drop-down menus.)
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