Current market interest rate

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Reference no: EM131807107

Kal Tech, a manufacturing company, needs to raise $2 million to finance an expansion project. The bonds will have a coupon interest rate of 12%, payable quarterly, and 20 years to maturity. What will the face value of the bonds have to be, if the bonds are to have an interest rate of 12% per year, payable quarterly, and a maturity date of 20 years? The current market interest rate is a nominal semiannual rate of 16% compounded quarterly.

Reference no: EM131807107

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