Question: Please answer the question in the picture. I cannot figure it out Michael owns a 5,000 par value 10% bond with semi-annual coupons The bond
Please answer the question in the picture. I cannot figure it out
Michael owns a 5,000 par value 10% bond with semi-annual coupons The bond will mature at the end of ten years at par. At issue, he sells the 10% bond and uses the proceeds to buy an 8% bond with semi-annual coupons which matures at par at the end of six years. Current yield rates are 6% convertible semi-annually. Determine the par value of the six-year bond. A5,000 ? 5,215 C5,545 D5,900 E 6,035
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