How would the market price of a bond be affected, Financial Management

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All other things held constant, how would the market price of a bond be affected if coupon interest payments were made semiannually instead of annually?

The majority of bonds issued in the United States pay interest semiannually (twice per year).  With semiannual interest payments we ought to adjust the bond valuation model by multiplying n the number of years to maturity by two and dividing k the annual interest rate by two.

 


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