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    The firm also has $40,000,000 in face value of 7.5% coupon

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    The firm also has $40,000,000 in face value of 7.5% coupon bonds outstanding. These bonds were also issued three years ago and currently have 12 years left to maturity. They pay the interest on coupons semiannually. The bonds currently trade at 104% of par.

    1.What would you probably pay if you bought one of these bonds today?

    2. Compute the Yield to maturity for one of these bonds?
    a. What is "pmt"?
    b. What is "N"?
    c. What is "FV"?
    d. What is "PV"?
    e. What is I?
    f. What is Yield?
    3. How many bonds are there?

    4. What is the market value of these bonds?

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    Solution Preview

    The firm also has $40,000,000 in face value of 7.5% coupon bonds outstanding. These bonds were also issued three years ago and currently have 12 years left to maturity. They pay the interest on coupons semiannually. The bonds currently trade at 104% of par.

    1.What would you probably pay if you bought one of these bonds today?

    We need to calculate how much we should pay for the bond by using the formula as follows: -

    where B is the issued price/current price
    C is the coupon payment
    r is the current ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what would you probably pay if you bought one of these bonds today.

    $2.19

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