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The Apple Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. The bond makes

The Apple Corporation has two different bonds currently outstanding. Bond M has
a face value of $20,000 and matures in 20 years. The bond makes no payments for the
first six years, then pays $900 every six months over the subsequent eight years, and
finally pays $1,300 every six months over the last six years. Bond N also has a face
value of $20,000 and a maturity of 20 years; it makes no coupon payments over the
life of the bond. If the required return on both these bonds is 4.7% compounded
semiannually, what is the current price of bond M? Of bond N? (20 Marks)
image text in transcribed
7. The Apple Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $900 every six months over the subsequent eight years, and finally pays $1,300 every six months over the last six years. Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is 4.7% compounded semiannually, what is the current price of bond M? Of bond N? (20 Marks)

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