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Business, 27.07.2020 01:01 bludragonfly33

Michael owns a 5,000 par value 10% bond with semi-annual coupons. The bond will mature at the end of ten years at par. At issue, he sells the 10% bond and uses the proceeds to buy an 8% bond with semi-annual coupons which matures at par at the end of six years. Current yield rates are 6% convertible semi-annually. Determine the par value of the six-year bond.

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Michael owns a 5,000 par value 10% bond with semi-annual coupons. The bond will mature at the end of...

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