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Consider a bond paying a coupon rate of 8% per year semiannually when the market interest rate is only 5%. The bond has twenty years
Consider a bond paying a coupon rate of 8% per year semiannually when the market interest rate is only 5%. The bond has twenty years until maturity.
- Find the bonds price today.
- Find the bonds price six months from now after the next coupon is paid if the interest rate rises to 7%.
- What is the total rate of return on the bond?
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Financial Accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, J. Mather
8th Edition
0470929383, 978-0470929384
