Provide the purchaser the same yield to maturity

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Reference no: EM132006950

A $1000 par value bond with coupons at 10% convertible semiannually is callable five years after issue. The bond matures for $1000 after 8 years and is sold to yield a nominal rate of 6% convertible semiannually under the assumption that the bond will not be called. Find the redemption value at the end of 5 years that will provide the purchaser the same yield to maturity.

Reference no: EM132006950

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