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Suppose our firm decides to issue 15-year bonds with a par value of $1,500 and annual coupon payments. The return on other bonds of similar
Suppose our firm decides to issue 15-year bonds with a par value of $1,500 and annual coupon payments. The return on other bonds of similar risk is 15%, so we decide to offer a 15% coupon interest rate.
What would be a fair price for these bonds?
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