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Fifteen years remain on a 25-year, 8% coupon bond payable semiannually with a face value of $1,000. The return on comparable bonds is 10%. The
Fifteen years remain on a 25-year, 8% coupon bond payable semiannually with a face value of $1,000. The return on comparable bonds is 10%. The formula for determining the market price of the bond today is:
a. PB = $40[FVFA10,25] + $1,000[FVF10,25]
b. PB = $40[PVFA4,30] + $1,000[PVF4,30]
c. PB = $80[PVFA4,15] + $1,000[PVF4,15]
d. PB = $40[PVFA5,30] + $1,000[PVF5,30]
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