SOP Ltd bonds have a par value of $1,000. The bonds pay semi-annual interest of $40 and mature in 5 years. a) How much would you pay for SOP’s bond if your required rate of return is 10%? b) How much would you pay if your rate of return is 8%?

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Chapter1: Investments: Background And Issues
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SOP Ltd bonds have a par value of $1,000. The bonds pay semi-annual interest of $40 and
mature in 5 years.
a) How much would you pay for SOP’s bond if your required rate of return is 10%?
b) How much would you pay if your rate of return is 8%?

 

 

 

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