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Chesterton, Inc. wants to sell you a 5.5 percent annual coupon bond that makes semiannual payments. Your required return on the bond is 5.90 percent annually with semi-annual compounding, and the bond matures in 6 years. How much would you pay for the bond given a $1,000 face value? |
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Calculating Bond Price,
Using TVM Calculation,
PV = [FV = 1,000, PMT = 27.50, N = 12, I = 0.059/2]
PV = $980.03
Chesterton, Inc. wants to sell you a 5.5 percent annual coupon bond that makes semiannual payments....
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