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What price per bond should suresafe be able to realize

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Reference no: EM132503531

Gonzalez Electric Company has outstanding a 10 percent bond issue with a face value of $1,000 per bond and three years to maturity. Interest is payable annually. The bonds are privately held by Suresafe Fire Insurance Company.

Question 1: Suresafe wishes to sell the bonds, and is negotiating with another party. It estimates that, in current market conditions, the bonds should provide a (nominal annual) return of 14 percent. What price per bond should Suresafe be able to realize on the sale?

 

Reference no: EM132503531

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