Foundations Of Finance
Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Chapter 7, Problem 9SP

(Bond valuation) National Steel’s 15-year, $1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is 7 percent.

  1. a. Compute the bond’s expected rate of return.
  2. b. Determine the value of the bond to you given your required rate of return.
  3. c. Should you purchase the bond?
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Foundations Of Finance

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What happens to my bond when interest rates rise?; Author: The Financial Pipeline;https://www.youtube.com/watch?v=6uaXlI4CLOs;License: Standard Youtube License