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What is the present value or worth of this bond

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Reference no: EM132935366

Question - Jimmy has a bond with a $1,000 face value and a coupon rate of 9.5% paid semiannually. It has a five-year life.

a) If investors are willing to accept a 14 percent rate of return on bonds of similar quality, what is the present value or worth of this bond? If you can help by showing the work?

b) What is the impact of paying interest semi-annually rather than annually? If you can help by providing the explanation?

Reference no: EM132935366

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