Question: Basic bond valuation Complex Systems has an outstanding issue of 51,000 -par-value bonds with a 16% coupon interest rate The issue pays interest annually and
Basic bond valuation Complex Systems has an outstanding issue of 51,000 -par-value bonds with a 16% coupon interest rate The issue pays interest annually and has 15 years remaining to its maturity date a. If bonds of simeat risk ate currently eaming a rate of return of 15%, how much should the Complex Systems bond sell for today? b. Describe the two posshble reasons why the rate on simiar-riak bonds is below the coupon interest rate on the Complex Systems bond. c. If the required retum is 16% insteod, what would the current value of Complex Systems' bend be? Contrast this finding with your findings in part a and discusa. a. If bonds of zindarilsk are curtently earning a rale of return of 15%, the Complex Systens bend should seill today for (Round to the neareat cent)
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