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Microsoft Engine Co. has the following securities outstanding: i) 1,000 bonds that have 10 years to maturity and pay an annual coupon of 9 percent and $1,000 face value, ii) 2,000 shares of Consols that pays a coupon payment of $50 per year. The firm has estimated the following costs of capital for its financial securities: 9 percent for bonds and 10 percent for Consols. What should be the total value of 1,000 bonds and 2, 000 shares of Consols?

Financial Management, Finance

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