### Two different bonds currently outstanding

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##### Reference no: EM13789176

The Morgan Corporation has two different bonds currently outstanding. Bond M has a face value of \$30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays \$800 every six months over the subsequent eight years, and finally pays \$1,000 every six months over the last six years. Bond N also has a face value of \$30,000 and maturity of 20 years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is 8 percent compounded semi annually, what is the current price of Bond M? Of Bond N?

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