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A 15-year $50,000 bond that has a dividend rate of 10% per year, payable semiannually, is currently for sale. If the expected rate of return of the purchaser is 8% per year, compounded semiannually, and if the inflation rate is expected to be 2.5% each 6-month period, what is the bond worth now (a) without an adjustment for inflation and (b) when inflation is considered?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92764417

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