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Corporations 14% coupon rate, semiannual payment, $1000 par value bonds, which mature in 30 years, are callable 5 years from today at $1050. They sell
Corporations 14% coupon rate, semiannual payment, $1000 par value bonds, which mature in 30 years, are callable 5 years from today at $1050. They sell at a price of $1353.54, and the yield curve is flat. Assume the interest rates are expected to remain at their current level. Q1: What is the best estimate of these bonds' remaining life? Q2: If the corporation plans to raise additional capital and wants to use debt financing, what coupon rate would it have to set in order to issue new bonds at par
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