KIC Company up plan play the $5 billion in the left the Coupon with 8%...
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KIC Company up plan play the $5 billion in the left the Coupon with 8% coupon, term 30 years. The interest rate on the current field of this bond is 7%. After one year, the bond will yield 10% or 6%, with the same yield. Emulate risk-neutral investors. a.If left the Voucher is not redeemable, what will its current price be? b.If left the coupon is redeemable after one year for $1080, will its price be higher or lower than the price you calculated in (a)? Why?
KIC Company up plan play the $5 billion in the left the Coupon with 8% coupon, term 30 years. The interest rate on the current field of this bond is 7%. After one year, the bond will yield 10% or 6%, with the same yield. Emulate risk-neutral investors.
a.If left the Voucher is not redeemable, what will its current price be?
b.If left the coupon is redeemable after one year for $1080, will its price be higher or lower than the price you calculated in (a)? Why?
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