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problem: The Mangold Corporation has 2 different bonds currently outstanding:

Bond M has a face value of dollar 22,500 and matures in twenty-two years. The bond makes no payments for the first 6 years, then pays dollar 1,500 every 6 months over the subsequent ten years, and finally pays dollar 1,800 every 6 months over the last six years.

Bonds N also have a face value of dollar 22,500 and a maturity of twenty-two years; it makes no coupon payments over value of bond. If the required return on these bonds is 12% compounded semiannually, the current price of bonds M & N is $__________ & $___________, respectively. [Give your answers to two decimal places]

Basic Finance, Finance

  • Category:- Basic Finance
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