Question
What is your estimate of the Fair Present Value (FPV) of aInternational Business Machines (IBM)bond that matures in 10 yrs with a par value of
What is your estimate of the Fair Present Value (FPV) of aInternational Business Machines (IBM)bond that matures in 10 yrs with a par value of $1,000.The coupon rate is 9.0% (semi-annual pmts).Your analyst informs you the proper risk premium forIBM is 3.0% and you observe the current 10 yr. US Treasury rate at 3.90%.
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
