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Should grumpy industrials purchase the bond

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Reference no: EM132916646

Problem 1: Grumpy Industrial Products' is considering purchasing a bond that matures in 16 years, the bond has a 7.60 % coupon that pays interest annually. The face value is $1,000 and the current market price is $1,062.50. Grumpy industrials have a required rate of return of 8%. What is the bond's expected rate of return? Should Grumpy industrials purchase the bond (explain your answer)?

Reference no: EM132916646

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