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Caven Buffet Industries issues bonds with a 7% coupon rate and $1000 face value. Interest is paid semi-anually and the bond has 18 years to
Caven Buffet Industries issues bonds with a 7% coupon rate and $1000 face value. Interest is paid semi-anually and the bond has 18 years to maturity. However, the bond does not pay the first two coupon payments and instead makes these payments at maturity. If investors require a 15% return, What is the bond's value?
A) $1,161.81
B) $3,034.73
C) $698.80
D) $448.48
Can you please show the work?
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