Question
Your firm's existing bonds trade with a yield to maturity of six percent. The state of Florida has offered to loan your firm $8,000,000
Your firm's existing bonds trade with a yield to maturity of six percent. The state of Florida has offered to loan your firm $8,000,000 at zero percent for four years. Repayment will be of the form of $2,000,000 per year for four years and the first payment is due in one year. What is the value of this offer?
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Introduction To Corporate Finance
Authors: Laurence Booth, Sean Cleary
3rd Edition
978-1118300763, 1118300769
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