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interest annually. a . Find the value of the bond if the required return is ( 1 ) 1 3 % , ( 2 )
interest annually.
a Find the value of the bond if the required return is and
value.
c What two possible reasons could cause the required return to differ from the coupon interest rate?
a The value of the bond, if the required return is is $Round to the nearest cent.
The value of the bond, if the required return is is $ Round to the nearest cent.
The value of the bond, if the required return is is $Round to the nearest cent.
b Use your finding in part a and the graph here, i to answer the following questions: Select from the dropdown menus.
When the required return is less than the coupon rate, the market value is
the par value.
When the required return is equal to the coupon rate, the market value is
the par value.
When the required return is greater than the coupon rate, the market value is
the par value.
c What two possible reasons could cause the required return to differ from the coupon interest rate? Select the best answer below.
A Tax rate has changed.
B Bond contract has changed.
Graphchart
C Firm's risk has changed.
D Cost of funds has changed.
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