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Problem:

The McKeegan Corporation has two different bonds currently outstanding. Bond M has a face value of $29,000 and matures in 17 years. The bond makes no payments for the first 5 years, then pays $1,700 every six months over the subsequent 7 years, and finally pays $2,400 every six months over the last 5 years. Bond N also has a face value of $29,000 and a maturity of 17 years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is 10 percent compounded semiannually, the current price of Bonds M and N is $______ and $ ,_____ respectively.

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Basic Finance, Finance

  • Category:- Basic Finance
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