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
Section: Chapter Questions
Problem 1PS
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Question
Your company needs to raise $3 million in Capital to buy equipment. You offer bonds at a discount price of $800 for a 4% coupon rate with a face value $1000 bond that matures in 20 years with dividends payable Semiannually. What is the Nominal and Effective interest rates per year (compounded semiannually)? Compute by hand.
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