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    Fair value of the bond

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    A1. (Bond valuation) A $1,000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bond's coupon rate is 7.4%. What is the fair value of this bond?

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    Solution Preview

    The fair value of the bond is the present value of interest and principal. The annual interest is $74 and ...

    Solution Summary

    The solution explains how to calculate the fair value of the bond

    $2.19

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