How much are you willing to pay for this bond today

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Question - A 20-year corporate bond has a par value of $1000 and a 9% annual coupon rate. Assume that your required rate of return is 10% and that you plan to hold onto this bond for 5 years. You and the market have expectations that in 5 years the yield-to-maturity for this bond (or another bond with similar risk and maturity) will be 8.5%. How much are you willing to pay for this bond today?

Reference no: EM132895458

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