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Your buildout is taking more time and money than you thought so you need to obtain an additional $200,000. You do this by selling bonds,
Your buildout is taking more time and money than you thought so you need to obtain an additional $200,000. You do this by selling bonds, you issue 200 $1,000 bonds maturing in 20 years at coupon rate of 4% with semiannual coupon payments. YTM on the bonds is 4% compounded semiannually when issued.
What is the value of a bond at issue?
What is the value of a bond in 5 years in YTM increases to 10% compounded semiannually?
Take what you know in this question and compare it to whats happening currently in bond markets.
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