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Problem:

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 15 years to maturity, and a coupon rate of 6.1 percent paid annually.

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Question: If the yield to maturity is 7.2 percent, what is the current price of the bond?

Note: Please explain comprehensively and give step by step solution.

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Category:- Basic Finance
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