Question

1. Calculate the Market Value of the following semi-annual bond . Its Par Value is $1,000....

1. Calculate the Market Value of the following

semi-annual bond

. Its Par Value is $1,000. The

coupon rate is 5.5%, market rate is 6.6% and time to maturity is 25 years.

a. Show work and calculate the price per bond:

b. Calculate the total value of 3 million bonds outstanding:

c. Calculate the firm’s Enterprise Value given that equity has a value of $12 million.

d. Calculate the value per share for the company’s common stock given 1 million shares are

outstanding

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