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Oriole Information Systems management is planning to issue 10-year bonds. The going market yield for such bonds is 9.300 percent. Assume that coupon payments will
Oriole Information Systems management is planning to issue 10-year bonds. The going market yield for such bonds is 9.300 percent. Assume that coupon payments will be made semiannually. Management is trying to decide between issuing an 9 percent coupon bond or a zero coupon bond. Oriole needs to raise $1 million.
What will be the price of an 9 percent coupon bond?
How many 9 percent coupon bonds would have to be issued?
What will be the price of a zero coupon bond?
How many zero coupon bonds will have to be issued?
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