A firm is considering issuing bonds to raise capital for a


A firm is considering issuing bonds to raise capital for a project. The leaders at the firm are trying to figure out how much the markets will buy their bonds for (market value). They have the following information:

Face Value= $100, Annual coupon payment = 9%, YTM=5%, Semi Annual coupon payments, and 10 year maturity.

1. Draw the Cash flow diagram.

2. What is the market value of the bond? (Show work)

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Financial Management: A firm is considering issuing bonds to raise capital for a
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