Find the nominal and effective rates of return per year

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Reference no: EM132010291

Allied Materials needs money for expanded composites manufacturing. It is offering small-denomination corporate bonds at a deep discount price of $800 for a $1000 face value bond that matures in 15 years with 6% coupon rate and pays the dividend semiannually. Find the nominal and effective rates of return per year, compounded semiannually, that Allied is paying an investor.

Reference no: EM132010291

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