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FIN - A bond of Telink corporation pays $100 in annual interest

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Question;A bond of Telink corporation pays $100 in annual interest, with a $1,000 par value. The bonds mature in 25 years. The market's required yield to maturity on a comparable bond is 8 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable risk bond (i) increase to 12 percent or (ii) decreases to 6 percent? c. Interpret your findings in parts a and b.

 

Paper#48639 | Written in 18-Jul-2015

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