Question: (a) How much should you be prepared to pay for a 10-year bond with a 6% coupon, semi-annual payments, and a semi-annually compounded yield of

(a) How much should you be prepared to pay for a 10-year bond with a 6% coupon, semi-annual payments, and a semi-annually compounded yield of 7.5%?

(b) Why do companies issue bonds?

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