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Peppy Pup, Inc. has bonds outstanding that have 3 years remaining to maturity, pay semiannual coupon payments, have a coupon rate of 6 percent, and
Peppy Pup, Inc. has bonds outstanding that have 3 years remaining to maturity, pay semiannual coupon payments, have a coupon rate of 6 percent, and a par value of $1,000. Unfortunately, Peppy Pup is having financial difficulty and the creditors have agreed to a postponement of all future interest payments until the bonds mature 3 years from now. The postponed payments will accrue interest at an annual rate of 9 percent (compounded semiannually) and they will then be paid as a lump sum at maturity 3 years from now. The required rate of return on these bonds is 20 percent. What is the current value of one of these bonds? Select one: O $659 O $678 O $697 O $716 O $735 O $754 O $773 $792 O $811
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