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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, 25 years to maturity, and a coupon rate of 6.7 percent paid annually.

Required:

If the yield to maturity is 7.8 percent, what is the current price of the bond?

Note: Please provide reasons to support your answer.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91149587

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