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Sawada Insurance Ltd. issues bonds with a face value of $100 million that mature in 12 years. The bonds carry a 6% interest rate and

Sawada Insurance Ltd. issues bonds with a face value of $100 million that mature in 12 years. The bonds carry a 6% interest rate and are sold at 104.35 to yield 5.5%. They pay interest semi-annually. (b) Explain why the issuance price of the bonds is not the same as their face value.

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