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The bonds have a 3.6% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years

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The bonds have a 3.6% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

Select the correct answer.


a. $5,181,342

b. $5,182,633

c. $5,183,063

d. $5,182,203

e. $5,181,772

Haswell Enterprises' bonds have a 10-year maturity, a 6.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 7.25%, based on semiannual compounding. What is the bond's price?

Select the correct answer.


a. $940.84

b. $933.44

c. $937.14

d. $929.74

e. $926.04

5-year Treasury bonds yield 5.3%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*?

Select the correct answer.


a. 3.00%

b. 1.60%

c. 2.65%

d. 1.95%

e. 2.30%

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Related Book For  answer-question
Foundations of Financial Management

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Posted Date: November 11, 2022 03:12:32
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