Bond valuation—zero coupon

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Reference no: EM131817379

?1. (Bond valuation?) Hamilton, Inc. bonds have a coupon rate of 11 percent. The interest is paid? semiannually, and the bonds mature in 8 years. Their par value is $1,000. If your required rate of return is 15 percent, what is the value of the? bond? What is the value if the interest is paid? annually?

If the interest is paid? semiannually, the value of the bond is $?(Round to the nearest? cent.)

2. (Bond valuation—zero coupon?) The Latham Corporation is planning on issuing bonds that pay no interest but can be converted into $1,000 at? maturity, 6 years from their purchase. To price these bonds competitively with other bonds of equal? risk, it is determined that they should yield 7 percent, compounded annually. At what price should the Latham Corporation sell these? bonds? The price of the Latham Corporation bonds should be $?(Round to the nearest? cent.)

Reference no: EM131817379

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