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Vick incorporated sold bonds on January 1,2005 . The bonds were 15 year bonds with a 4% coupon. The market rate of interest was 5
Vick incorporated sold bonds on January 1,2005 . The bonds were 15 year bonds with a 4% coupon. The market rate of interest was 5 percent. The terminal value of the bond is 1000 in all practice problems and on exam as well. In the exam questions I will explicitly state it. 1. What was the price of the bonds ? 2. What was the interest expense for the first two years? 3. On January 1, 2007 (after two years) the market rate of interest was now 3 percent. What would be the price of the bonds now? 4. If Vick were to buy back the bonds at this time, what would be the gain or loss
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