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A bond of Visador Corporation pays $70 in annual interest, with a $1,000 par value. The bonds mature in 17 years. The market's required yield to maturity on a comparable-risk bond is 8.5 percent. a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 11 percent or (ii) decreases to 6 percent? c. Interpret your finding in parts a and b.
Sagot :
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