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To finance its budget deficit for the fiscal year 2020, the West African nation of Ghana decided to issue an euro bond to raise $3

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To finance its budget deficit for the fiscal year 2020, the West African nation of Ghana decided to issue an euro bond to raise $3 Billion. The finance minister received approval to issue the bond with a coupon rate of 10% per year with semiannual payments with a 30 year maturity date. At the time the bond was issued, the market conditions had changed and the market interest rate had risen to 12% per year. If the bond was undersubscribed and only 90% of the original bond amount was sold in the market: i. Draw the cash flow diagram for the bond ii. how much did Ghana raise from the bond sale? iii. Ir Ghana decides to buy all the bonds back with a promise of paying an effective annual inters rate of 14,49% after 15 years of the sale, how much will Ghana spend on buying all the bonds for

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