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Sasha Company has a level-coupon bond with a 9% coupon rate; interest is paid annually. The bond has 20 years to maturity and a face
Sasha Company has a level-coupon bond with a 9% coupon rate; interest is paid annually. The bond has 20 years to maturity and a face value of $1,000; similar bonds currently yield 7%. By prior agreement the company will skip the coupon interest payments in years 8, 9, 10. These payments will be repaid, without interest, at maturity. What is the bond's value?
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