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The Smith Company has two bond issues outstanding. Both of the bonds pay $100 annual interest plus $1,000 at maturity. Bond L has a maturity
The Smith Company has two bond issues outstanding. Both of the bonds pay $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S has a maturity of 1 year.
What will be the value of each of these bonds when the going rate of interest is 4%? And 10%?
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