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Bonus Value . You have a bond that pays $ 100 of annual interest, with a value of $ 1,000 and matures in 15 years.
Bonus Value. You have a bond that pays $ 100 of annual interest, with a value of $ 1,000 and matures in 15 years. Your required rate of return is 12%. a. Calculate the value of the bonus b. How does the value change if your required rate of return: 1. Increase to 15% 2. Decrease to 8% c. Assume that the bond matures in 5 years instead of 15 years. Re-compute your answers in part b.
No Excel program, please.
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