Tax-exempt bond was recently issued at an annual

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Reference no: EM131068371

A tax-exempt bond was recently issued at an annual 10 percent coupon rate and matures twenty years from today. The par value of the bond is $5,000.

A. If required market rates are 10 percent, what is the market price of the bond?

B. If required market rates fall to 5 percent, what is the market price of the bond?

C. If required market rates rise to 20 percent, what is the market price of the bond.

D. At what required market rate (5 percent, 10percent, or 20percent) does the above bond sell at a discount? At a premium? Comment

Reference no: EM131068371

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