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A $1,000 par value bond was issued five years ago at a 12 percent coupon rate. It currently has 25 years remaining to maturity. Interest rates on similar debt obligations are now 14 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

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Answer:

a. $862.06

b. 0.1379 or 13.79%

c. 0.1600 or 16.00%

Explanation:

Please see attachment

A $1,000 par value bond was issued five years ago at a 12 percent coupon rate. It-example-1
A $1,000 par value bond was issued five years ago at a 12 percent coupon rate. It-example-2
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