Question: A bond with 5 years to maturity and a coupon rate of 6% has a par, or face, value of $20,000. Interest is paid annually.

A bond with 5 years to maturity and a coupon rate of 6% has a par, or face, value of $20,000. Interest is paid annually. If you required a return of 8% on this bond, what is the value of this bond to you?

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The PV of a bond is the PV of its future cash flows In the case of the 5year bond ... View full answer

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