What is the price of the bonds with five years to maturity

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The Nickelodeon Manufacturing Co. has a series of $1,000 par value bonds outstanding. The bonds pay interest semi-annually, and some are due in 5 years while other are due in 9 years.

The details on the bonds follow:

Coupon rate 9%
Required rate of return 17%

Problem 1: What is the price of:

A) the bonds with 5 years to maturity?
B) the bonds with 9 years to maturity?
C) Explain why the current market values of the bonds differ even though they have the same coupon payments.

Reference no: EM132701597

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