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Fix-It Inc. recently issued 10-year, $1000 par value bonds at an 11% coupon rate. Assume bond coupons are paid semiannually.

A. Two years later, similar bonds are yielding investors 6%. At what price are Fix-Its bonds selling? Round the answer to the nearest cent. $   

B. What would the bonds be selling for if yields had risen to 12%? Round the answer to the nearest cent. $   

C. Assume the conditions in part a. Further assume interest rates remain at 6% for the next 8 years. Find the price of the Fix-It bonds at the end of year 10. Round the answer to the nearest cent.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92065464

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