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   ​(Bond valuation​) Xerox issued bonds that pay $ 47.50 in interest each year and will...


  
​(Bond valuation​)
Xerox issued bonds that pay $ 47.50 in interest each year and will mature in 5 years. You are thinking about purchasing the bonds. You have decided that you would need to receive a return of 4
percent on your investment.

What is the value of the bond to​ you, first assuming that the interest is paid annually and then​ semiannually?

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Answer #1

Value of Bond = PV of Cash flows from it.

If Int is paid annually:'

If Int paid Semi Annually:

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