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A firm issues a zero coupon bond with a face value of$ l OOO maturing in five years Bonds with similar risk are currently yielding 5 percent per year What is the value of the bond b A firm

 A firm issues a zero-coupon bond with a face value of$ l ,OOO, maturing in five years. Bonds with similar risk are currently yielding 5 percent per year. What is the value of the bond?

b. A firm issues a bond with a face value of $1,000 and a coupon rate of 5 percent per year, maturing in five years. Bonds with similar risk are currently yielding 5 percent per year. What is the value of the bond?

c. A firm issues the same bond as in part (b) but with an annual coupon rate of 4 percent per year. What is the value of the bond?

May 26 2020 View more View Less

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