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IV. Bond Valuation (15 points) a. Aladin Inc., has semiannual, 6.5% percent coupon bonds on...

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IV. Bond Valuation (15 points) a. Aladin Inc., has semiannual, 6.5% percent coupon bonds on the market that currently have 10 years left to maturity. If the market rate of return for this bond is 7.5 percent two years from now, what will the bond's price be at that time? b. A corporate bond pays 7 percent interest. How much would a municipal bond have to pay to be equivalent to this on an after tax basis if you are in the 15 marginal percent tax bracket? that time, the inflation rate was 1.6 percent. What was your real rate of return? interest payments, 15 years to maturity, and a market price of $1,050. At this price, the c. Last year, you earned a rate of return of 5.42 percent on your bond investments. During d. Jasmin Industrial Goods has $1,000 face value bonds on the market with semiannual bonds yield 6 percent. What must be the coupon rate on these bonds? 4

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