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Homework answers / question archive / The Sampson Company issued a $ 1,000 bond 5 years ago with an initial term of 25 years and a coupon rate of 6%

The Sampson Company issued a $ 1,000 bond 5 years ago with an initial term of 25 years and a coupon rate of 6%

Accounting

The Sampson Company issued a $ 1,000 bond 5 years ago with an initial term of 25 years and a coupon rate of 6%. Todays interest rate is 10%.

 

    1. What is the bonds current price if interest is paid semiannually as it is on most bonds?
    2. What is the price if the bonds interest is paid annually? Comment on the dif-ference between ( a) and ( b).
    3. What would the price be if interest was paid semiannually and the bond was issued at a face value of $ 1,500?

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