A for profit company has a series of 1000 par value bonds, Finance Basics

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A for profit company has a series of 1000 par value bonds

Question: A for profit company has a series of $1000 par value bonds outstanding. Each bond pays interest semi-annually and carries an annual coupon rate of 6%. Some bonds are due in four years while others are due in 10 years. If the required rate of return on bonds is 10%, what is the current price of: (show your work).

a) The bonds with 4 years to maturity? show your work

b) The bonds with 10 years to maturity?

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Finance Basics: A for profit company has a series of 1000 par value bonds

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