A bond was issued five years ago with 20 years to maturity, Ask an Expert

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A bond was issued five years ago with 20 years to maturity carrying 8 percent coupon rate and it was issued at par. The issuer’s financial performance has deteriorated significantly and the premium for the possibility of bankruptcy has changed from 3 percent to 5 percent. What is the current price of this bond if the interest is paid annually?

All answers for rate of return/interest rate must be expressed as a percentage and calculated to two places after the decimal point.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91780763

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