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2. BCD Company issued several hundred million dollars' worth of bonds twenty-one years ago. These bonds had 25-year original maturities; therefore they will mature in

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2. BCD Company issued several hundred million dollars' worth of bonds twenty-one years ago. These bonds had 25-year original maturities; therefore they will mature in four years. Each individual bond has a $1,000 par value and a 7% annual coupon interest rate, with interest paid semiannually (unlike what question 1 above might seem to suggest, bonds issued by US-based corporations typically provide interest payments semiannually, not annually). Today, rational buyers of bonds with similar risk, 4-year remaining lives, and semiannual interest payments require a 10% annual percentage rate (APR) of return. What should a rational investor pay for one of these BCD bonds? If BCD were to issue 4-year bonds today, what annual coupon interest rate would we expect them to pay

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