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Cunningham Company has a bond issue of $1000 par value bonds with a 6% annual couponinterest rate. The issue has ten years remaining to the

Cunningham Company has a bond issue of $1000 par value bonds with a 6% annual couponinterest rate. The issue has ten years remaining to the maturity date. Bonds of similar risk arecurrently selling to yield 8% rate of return.

1. Will the Cunningham Company bonds sell for a premium or a discount?

2. Calculate the current value (what an investor will pay today) of each CunninghamCompany bond

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