Question
The Blossom Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 9.825 percent. The current market rate for
The Blossom Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 9.825 percent. The current market rate for similar securities is 11.3 percent. Assume that the face value of the bond is $1,000. Suppose the bond were to mature in 12 years. What will be the bond's price if rates in the market (i) decrease to 9.30percent or (ii) increase to 12.3percent?
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Fundamentals of corporate finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
2nd Edition
978-0470933268, 470933267, 470876441, 978-0470876442
