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Company XYZ issued a bond 4 years ago with face value of $100,000 for a period of 12 years. The coupon rate is 6% per
Company XYZ issued a bond 4 years ago with face value of $100,000 for a period of 12 years. The coupon rate is 6% per year and bondholders will be paid semi-annually until the maturity of the bond.
Now the bond is available for sale on the market. If an investor is interested to purchase this bond, what is the maximum amount that he/she is willing to pay for the bond if the market interest rate is 8% per year? (5 marks)
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