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The XYZ Company's bonds have a face value of $1,000, will mature in ten years, and carry a coupon rate of 12 percent. Assume interest
The XYZ Company's bonds have a face value of $1,000, will mature in ten years, and carry a coupon rate of 12 percent. Assume interest payments are made semi-annually.
a. Determine the present value of the bond's price if the required rate of return is 12 percent.
b. How would your answer change if the required rate of return is 10 percent?
c. How would your answer change if the required return is 16 percent?
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