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What will be the value of each of these bonds

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Question - The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S has a maturity of 1 year.

What will be the value of each of these bonds when the going rate of interest is

(1) 5%,

(2) 8%, and

(3) 12%?

Assume that there is only one more interest payment to be made on Bond S.

Reference no: EM133071076

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