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Calculate the value of the bond

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Reference no: EM133305720

Financial Management Chapter 9

Question

A bond of Telink Corporation pays ?$100 in annual? interest, with a ?$1,000 par value. The bonds mature in 10 years. The? market's required yield to maturity on a? comparable-risk 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) increases to 12 percent or? (ii) decreases to 5 percent?

c. Interpret your findings in parts a and b.

Reference no: EM133305720

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