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Calculate the value of the bond and determine result

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Reference no: EM132944529

Problem 1: A company's bonds currently sell for $1,150, have a coupon rate of 11% and a par value of $1,000, pay interest annually. The required yield is 10%. They mature in 18 years. Calculate the value of the bond and determine your result.

a) It is worth the same $1,150 and its value is at par.
b) It is worth $1,082. If you compare it with $1,150 it is worth $1,175.
c) It is worth $1,175. If you compare it with $1,150 it has a Premium.

Reference no: EM132944529

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