A tax-exempt bond was issued at an annual 8% coupon rate and matures matures 20 years from
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Question:
A tax-exempt bond was issued at an annual 8% coupon rate and matures matures 20 years from today. The par value of the bond is $5,000.
i) If the required market rates are 8%, What is the market value of the bond?
ii) if the required market rates rise to 12%, What is the market value of the bond?
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