Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?

Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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