Bonds have maturity value

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Red Company bonds have a maturity value of $1,000, and pay 12% annual coupon. They mature in 2036 and are priced at $1,345. Blue Enterprises, another company in the construction industry, also has $1,000 maturity value bonds paying 7% annual coupon, maturing in 2036, and are priced at $802. If you feel that both these bonds have the same risk, which one would you choose? Why? Show all the steps

Reference no: EM131051675

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