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Financial Option 3: $30 Million Investment in Bonds Rationale for investment: The business that's offering these bonds for sale contracts with another business in China to assemble computer components. The Chinese business is known to have used child labor in the past, but claims it has stopped this practice. However, the U.S. business selling these bonds has not investigated to verify whether these claims are true or not.
Assumptions to consider:
10-year bond
8% coupon
Priced at a discount: $95
Discount rate is 9%
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