Draw the cash flow diagram in solution sheet

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Reference no: EM132761923

Secula Builders, Inc. only paid ?12,000.00 for a ?20,000.00 worth of mortgage bond. The bond's maturity date is 20 years from the year of issuance, with the bond coupon rate of 10%, payable quarterly. Assuming that the bond is in default, it will not give a dividend for the next 3 years. If the bond dividend is paid for the following 5 years (after 3 years) and the company sells the bond for ?14,000.00:

a) Draw the Cash Flow diagram in your solution sheet including the functional symbols.

b) Determine the rate of return per quarter. show the complete solution in your solution sheet.

Reference no: EM132761923

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