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GT Corporation plans to raise some capital by issuing a new 10-year bond with the par of $1,000 and 6.5% annual coupon. The finance manager
GT Corporation plans to raise some capital by issuing a new 10-year bond with the par of $1,000 and 6.5% annual coupon. The finance manager asks you to do some research and provide a fair price for this bond. You know that the firm just issued a 15-year bond two years ago with the par of $1,000 and 5% semi-annual coupon. The current price for this existing bond is $985. What is the fair price of the new bond you should provide to the manager? (assuming they have the same EAR) $1,106.79 $1,097.28 $1,103.66 O$985
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