Aaa firmrsquos semiannual bond has 12 years maturity and, Ask an Expert

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AAA firm’s semiannual bond has 12 years maturity and coupon rate of 8.75% semiannually. The firm also sells annual bonds with all the same condition except the coupon is paid annually (means ytm is the same). What is the price of this annual coupon bond?(hint: the two bonds should offer the same annual effective rate, not semi-rate * 2)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91730600

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