If investors require a return equal to 6 percent to invest


Question - Lightning Electric's outstanding bond has a $1,000 maturity value and a 4.5 percent coupon rate of interest (paid semiannually). The bond, which was issued five years ago, matures in 10 years. If investors require a return equal to 6 percent to invest in similar bonds, what is the current market value of Lightning's bond?

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Accounting Basics: If investors require a return equal to 6 percent to invest
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