Telnik corporation bonds pay 8250 in interest paid, Ask an Expert

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Telnik Corporation bonds pay $82.50 in interest, paid semi-annually with a $1,000 par value. The bonds mature in 15 years. Your required rate of return is 9 percent.

A. Calculate the value of the bond

B. Calculate the value of the bond if interest rates unexpectedly increased by 1%

C. An alternative investment offers the same coupon rate but matures in 5 years. What would be its value at a required return of 9 percent and 10 percent

D. Explain why the market would require a lower return on the alternative investment than on the alternative investment

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92814567

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