The florida investment fund buys bonds of the gator


The Florida Investment Fund buys bonds of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate of interest) is 10 percent. The bonds have a 5-year maturity.

Using an assumption of semiannual interest payments, compute the price of the Gator Corporation bond. (Refer to “Semiannual Interest and Bond Prices” in Chapter 10 for review if necessary).

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Financial Management: The florida investment fund buys bonds of the gator
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