What is the maximum amount William should be willing to pay

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Q1. Oriole Corp is issuing a 10-year bond with a coupon rate of 12 percent. The interest rate for similar bonds is currently 4 percent. Assuming annual payments, what is the value of the bond?

Q2. ?William Brown just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Oriole Corp. that pays an annual coupon rate of 4.5 percent. If the current market rate is 9.00 percent, what is the maximum amount William should be willing to pay for this bond?

Reference no: EM133021119

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