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Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 8 percent, a YTM of 6 percent, and 14
Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 8 percent, a YTM of 6 percent, and 14 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond has a coupon rate of 6 percent, a YTM of 8 percent, and also has 14 years to maturity. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 5 years? In 9 years? In 13 years? In 14 years?
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