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The Desreumaux Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1000 at maturity. Bond L has a maturity of 15
The Desreumaux Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1000 at maturity. Bond L has a maturity of 15 years and Bond S has a maturity of one year. What will be the value of each of these bonds when the going rate of interest is 5%, 7% and 11%? Assume that there is only one more interest payment to be made on Bond S.
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