Question
. What is the market value of a $1,000 face value bond that pays an annual interest rate of 6.5 percent, with seven years to
. What is the market value of a $1,000 face value bond that pays an annual interest rate of 6.5 percent, with seven years to maturity, assuming the current market rate to be 2.75 percent? Is this bond trading at par, premium, or discount? What is its cost of debt to the company, assuming a 35 percent tax rate?
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Financial Economics
Authors: Zvi Bodie, Robert C Merton, David Cleeton
2nd Edition
0558785751, 9780558785758
