Issued bond with an annual coupon rate

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Reference no: EM131564413

AF Inc. issued a bond with an annual coupon rate of 10% with interest paid annually. The bond matures in 15 years. The par value of the bond is $1,000.

1) If your required return for this type of bond is 15%, what is the price you are willing to pay for the bond?

2) If your required return was 5%, what is the price you are willing to pay for the bond?

3) Compute the price at 15%, if the coupon interest is paid semiannually.

4) Compute the price at 5%, if the coupon interest is paid semiannually.

Reference no: EM131564413

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