What is the market price of the bond

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Reference no: EM131068362

A tax-exempt bond was recently issued at an annual 12 percent coupon rate and matures twenty years from today. The par value of the bond is $1,000.

A. If required market rates are 12 percent, what is the market price of the bond?

B. If required market rates fall to 6 percent, what is the market price of the bond?

C. If required market rates rise to 18 percent, what is the market price of the bond.

D. At what required market rate (6 percent, 12 percent, or 18 percent) does the above bond sell at a discount? At a premium?

Reference no: EM131068362

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