What is the value of the bond of hanover county hospital

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Hanover County Hospital plans to issue a tax-exempt bond at an annual coupon rate of 6 percent with a maturity of 20 years. The par value of the bond is $1,000. (Hint: See Appendix G)

a) If required market rates are 6 percent, what is the value of the bond?

b) If required market rates fall to 3 percent, what is the value of the bond?

c) If required market rates change to 10 percent, what is the value of the bond?

d) At what required market rate (6 percent, 3 percent, or 10 percent) does the above bond sell at a discount? At a premium?

Reference no: EM132408132

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