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QUESTION 3 Part A: Adams Enterprises bonds currently sell for $910. They have a 15-year maturity, an annual coupon of $85, and a par value
QUESTION 3
Part A: Adams Enterprises bonds currently sell for $910. They have a 15-year maturity, an annual coupon of $85, and a par value of $1,000. What is their yield to maturity?
a. 7.34%
b. 9.66%
c. 8.60%
d. 9.95%
e. 11.21%
Part B: Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 5.00%, based on semiannual compounding. What is the bonds price?
a. $1,235.47
b. $976.02
c. $1,457.85
d. $1,050.15
e. $1,359.01
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