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Bond Valuation (20 points)(a) Gugenhei , Inc. offers a 5percent coupon bond with annual payments. The yield to maturity is 4percent and the maturity date
Bond Valuation (20 points)(a) Gugenhei , Inc. offers a 5percent coupon bond with annual payments. The yield to maturity is 4percent and the maturity date is 20 years. What is the market price of a dollar1.000 face value bond? (10 points)(b) Orange Corporation has bonds on the market with 20 years to maturity, dollar1,000 par value, a YTM of 10percent, and a current price of dollar1,200. The bond makes semiannual coupon payment. What must the coupon rate be on the bond? (10 points)
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