Question
Joe is considering purchasing a ten-year bond that has a face value of $10,000. The bond...
Joe is considering purchasing a ten-year bond that has a face value of $10,000. The bond has a bond rate of 10% with bond premiums paid quarterly (10%/yr/qtr). The bond has a remaining life of four years. The seller is asking $9250 for the bond and Joe has set a personal MARR of 12% compounded quarterly (12%/yr/qtr). Would you recommend he purchase the bond? Justify your answer. (Note – Assume Joe will own the bond until it matures..... this means it will be redeemed for face value)
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