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Show work in Excel with formulas Louis Lindsey is a moderate investor who asked for your advice about two bonds to which his company is
Show work in Excel with formulas
Louis Lindsey is a moderate investor who asked for your advice about two bonds to which his company is considering investing. One is a seasoned issue of the Star Accessory Company that was first sold 22 years ago at a face value of $1000, with a 25-year term paying 6%. The other is a new 30-year issue of the Landry Escalator Company that is coming out now at a face value of $1000. Interest rates are now 6%, so both bonds will pay the same coupon rate.
Address the following:
- What is each bond worth today? Show your calculations in excel
- If the interest rates were to rise to 12% today, what would each bond be worth? Show all work in excel with formulas
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