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Suppose our firm decides to issue 12-year bonds with a par value of $12,500 and semi-annual coupon payments. We still offer a 16% coupon interest
Suppose our firm decides to issue 12-year bonds with a par value of $12,500 and semi-annual coupon payments. We still offer a 16% coupon interest rate, but immediately after issue interest rates rise to 18%.
What happens to the price of these newly issued bonds?
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