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How much would you pay for a 8.6% Corp Bond that has a remaining maturity of...

How much would you pay for a 8.6% Corp Bond that has a remaining maturity of 10 years if the investors' required rate of return is 6%?

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Answer #1

Bond price = PV of Cash flows from it

Let's assume 1000 is maturity price.

Computation of Bond Price:

$1.19136 can be paid for each $1 maturity value

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