Determine the current market value of the bond, Finance Basics

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Determine the current market value of the bond

Ciza Inc. raised $100 million by floating corporate bonds. Each bond paid a coupon of 7% with a par value of $100,000 and will mature in 4 years.

A. Determine the current market value of the bond if your required rate of return is 14%.

B. Holding everything constant and assuming that the coupon is paid on a semiannual basis, what is the intrinsic value of the bond to you? Discuss your answer?

C. Now assume annual coupon payments but for 20 years remaining to maturity, what is the value of the bond? Discuss your answer.

D. What is the bond's current yield? Discuss your answer?

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Finance Basics: Determine the current market value of the bond

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Finance Basics: Determine the current market value of the bond

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Finance Basics: Determine the current market value of the bond

Reference No:- TGS056309

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