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The Nickelodeon Manufacturing Co. has a series of $1,000 par value bonds outstanding. The bonds pay interest semi-annually, and some are due in 5 years
The Nickelodeon Manufacturing Co. has a series of $1,000 par value bonds outstanding. The bonds pay interest semi-annually, and some are due in 5 years while other are due in 9 years. The details on the bonds follow: Coupon rate Required rate of return 9% 15% What is the price of: A) the bonds with 5 years to maturity? B) the bonds with 9 years to maturity? C) Explain why the current market values of the bonds differ even though they have the same coupon payments
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