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What is the value of a Glim Ring, Inc. bond that has the usual face value, a coupon rate of 11% paid semiannually, and matures
What is the value of a Glim Ring, Inc. bond that has the usual face value, a coupon rate of 11% paid semiannually, and matures in 13 years? Assume a discount rate of 16%. If your answer was greater than $1,000: Why would an investor ever pay more than $1,000 if they will eventually only receive a face value of $1,000? If your answer was less than $1,000: Why would a firm ever sell a bond for less than $1,000 if they will eventually have to pay a $1,000 face value?
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