The Camry Robbins Corporation has two different bonds currently outstanding. Bond A has a face value of
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The Camry Robbins Corporation has two different bonds currently outstanding. Bond A has a face value of $40,000 and matures in 20 years. The bond makes no payments for the first six years and then pays $2,000 semi-annually for the subsequent eight years, and finally pays $2,500 semi-annually for the last six years. Bond B also has a face value of $40,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. If the required rate of return is 12 percent compounded semiannually, what is the current price ofBond A? of Bond B?
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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