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Compute the bonds expected rate of return

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Question

(Bond valuation) National Steel's 15-year, $1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is 7 percent.

a. Compute the bond's expected rate of return.

b. Determine the value of the bond to you given your required rate of return.

c. Should you purchase the bond.

Reference no: EM132344639

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