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Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluation. The firm has a bond
- Due to a number of lawsuits related to toxic wastes, a major chemical manufacturer has recently experienced a market reevaluation. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest being paid semiannually. The required rate on this debt has now risen to 12 percent. What is the current value of this bond?
a. | $1,273 |
b. | $1,000 |
c. | $725 |
d. | $550 |
e. | $450
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