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The 8%-coupon-rate bonds of the X Company have exactly 12 years remaining to maturity. The current market price of one of these $1,000-parvalue bonds is
The 8%-coupon-rate bonds of the X Company have exactly 12 years remaining to maturity. The current market price of one of these $1,000-parvalue bonds is $700. Interest is paid semiannually. Using a nominal annual required rate of return of 12% on these bonds, would you recommend investing in this bond? (assuming semiannual discounting)?
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