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The markets required return suddenly rises to 7 what are

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Reference no: EM13483884

You have gathered the following data on three bonds:

Bond                Maturity               Coupon%

A                     10 yrs                         9%

B                      9 yrs                          1%

C                      5 yrs                          5%

a. If the market's required return on all three bonds is 6%, what are the market prices of the bonds (you can assume annual interest payments).

b. The market's required return suddenly rises to 7%. What are the new bonds' prices, and what is the percentage change in price for each bond?

Reference no: EM13483884

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