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What is the importance of bond valuation

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Reference no: EM133011529

Question - CDE Corp. has just issued a 15-year, 12% bond, which pays interest annually. The current required rate of return of similar bonds in the market is 14%.

a. Determine the market price of the bonds.

b. Is the bond issued at a discount, premium or par? Why?

c. Find the value of the bond if it matures in

1. 10 years

2. 20 years

d. What do you notice about the market value of the bonds if the maturity date changes to 10 years or 20 years? Why?

e. What is the importance of bond valuation?

Reference no: EM133011529

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