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New Edge Inc., a company specializing in precision technology specific to the agricultural industry, has a par value bond issued five years ago at a
New Edge Inc., a company specializing in precision technology specific to the agricultural industry, has a par value bond issued five years ago at a percent coupon rate. It currently has years remaining to maturity. Interest rates on similar debt obligations are now percent.
A Compute the current price of the bod. Assume semiannual payments.
B If you bought the bond five years ago, based on today's price, what is your capital gain or loss percentage?
C In a different scenario, assume your friend buys a New Edge bond today and holds it until maturity. What will be your friend's capital gain or loss?
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