​Enterprise, Inc. bonds have an annual coupon rate of 13 percent. The interest is paid semiannually and the bonds mature in 14 years. Their par value is ​$1,000. If the​ market's required yield to maturity on a​ comparable-risk bond is 12 ​percent, what is the value of the​ bond? What is its value if the interest is paid​ annually?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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  ​Enterprise, Inc. bonds have an annual coupon rate of 13 percent. The interest is paid semiannually and the bonds mature in 14 years. Their par value is ​$1,000. If the​ market's required yield to maturity on a​ comparable-risk bond is 12 ​percent, what is the value of the​ bond? What is its value if the interest is paid​ annually?

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