You own 30 year bonds issued by test inc that are


You own 30 year bonds issued by Test Inc that are non-callable, have a $95 coupon, and a par value of $1000. You plan to hold the bond for 10 years and your required rate of return on this bond is 8%. You plan to buy it and hold it for 10 years at which time you (and the market) think that the yield to maturity on similar 20 year bonds will be 5%. How much would you be willing to pay for the bond today?

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Financial Management: You own 30 year bonds issued by test inc that are
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