What is the current price of bond a

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Point 1: The Camry Robbins Corporation has two different bonds currently outstanding. Bond A has a face value of $40,000 and matures in 20 years. The bond makes no payments for the first six years and then pays $2,000 semi-annually for the subsequent eight years, and finally pays $2,500 semi-annually for the last six years. Bond B also has a face value of $40,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond.

Question 1: If the required rate of return is 12 percent compounded semi- annually, what is the current price ofBond A? of Bond B?

Reference no: EM132482530

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