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Pecos Manufacturing has just issued a 15-year, 14% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 12%, and the
Pecos Manufacturing has just issued a 15-year, 14% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 12%, and the company is certain it will remain at 12% until the bond matures in 15 years.
- Assuming that the required return does remain at 12% until maturity, find the value of the bond with (1) 15 years, (2) 12 years, (3) 9 years, (4) 6 years, (5) 3 years, (6) 1 year to maturity
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