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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Complex Systems has an outstanding issue of $1000-par-value bonds with a 12% coupon interest rate. The issue pays interest annually and has 16 years remaining to its maturity date. a) if bonds of similar risk are currently earning a 10% rate of return, how much should the complex system bond sell for today? b) Describe the 2 possible reason s why the rate on similar-risk bond is below the coupon interset rate on the Complex System bond. C ) If the required return were at 12% instead of 10%, what would the current value of Complex System bond be? Contrast this findings with your finds in the part a and discuss.
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