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You own a 20- year $1,000 par value bond paying 7 percent interest annually. The market price of the bond is $875 and your required

You own a 20- year $1,000 par value bond paying 7 percent interest annually. The market price of the bond is $875 and your required rate of return is 10 percent.

A. compute the bonds expected rate of return

B. Determine the value of the bond to you, given your required rate of return

C. Should you sell the bond or continue to own it?

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