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GracieCorporationpaysan11percentcouponrateondebenturesthatareduein10years.Thecurrentyieldtomaturityonbondsofsimilarriskis8percent.Thebondsarecurrentlycallableat$1,110.Thetheoreticalvalueofthebondswillbeequaltothepresentvalueoftheexpectedcashflowfromthebonds. a. Find the market value of the bonds using semiannual analysis. b. Do you think the bonds will sell for the price you arrived

  • GracieCorporationpaysan11percentcouponrateondebenturesthatareduein10years.Thecurrentyieldtomaturityonbondsofsimilarriskis8percent.Thebondsarecurrentlycallableat$1,110.Thetheoreticalvalueofthebondswillbeequaltothepresentvalueoftheexpectedcashflowfromthebonds.

a. Find the market value of the bonds using semiannual analysis.

b. Do you think the bonds will sell for the price you arrived at in part a? Why?

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