What is the market price of these bonds

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Reference no: EM131063439

Fort Mill Inc. has issued eight-year bonds with a coupon of 6.375 percent and semiannual coupon payments. The required rate of return on such bonds is 7.65 percent.

a. What is the market price of these bonds?

b. If the above bond is callable after five years at an 8.5 percent premium on the face value, what is the expected return on this bond? (Hint: Do not forget to annualize your returns)

Reference no: EM131063439

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