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A $1,000 face value bond of Acme Inc. pays an annual coupon and carries a coupon rate of 7.25%. It is was a 30 year bond when issued and it has 9 years remaining to maturity. If it currently has a yield to maturity of 5.75%.

 (a) What interest payments do bondholders receive each year?

 (b) What is the current bond price?

 (c) What is the bond price if the yield to maturity rises to 6.75%?

Financial Management, Finance

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