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Posted on Jul 20, 2024

There is an issue of 4,500 coupon bonds outstanding that have a face value of $1,000, mature in 18 years, and pay 5.75% (annual) coupons.

There is an issue of 4,500 coupon bonds outstanding that have a face value of $1,000, mature in 18 years, and pay 5.75% (annual) coupons. These bonds are currently trading at 122.154% of par.

1. What is the value of the coupon bonds?

2. What is the before-tax required return on the coupon bonds?

3. What is the after-tax required return on the coupon bonds?

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