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Moerdyk Corporation's bonds have a 15-year maturity, a 5.25% coupon rate with interest paid semiannually, and...

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Finance

Moerdyk Corporation's bonds have a 15-year maturity, a 5.25%coupon rate with interest paid semiannually, and a par value of$1,000. The nominal required rate of return on these bonds is7.25%. What is the bond’s intrinsic value? Enter your answerrounded to two decimal places. Do not enter $ or comma in theanswer box. For example, if your answer is $12,300.456 then enteras 12300.46 in the answer box.

Answer & Explanation Solved by verified expert
4.0 Ratings (784 Votes)
Intrinsic Value of the Bond The Intrinsic Value of the Bond is the Present Value of the Coupon Payments plus the Present Value of the face Value Face Value of the bond 1000    See Answer
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Moerdyk Corporation's bonds have a 15-year maturity, a 5.25%coupon rate with interest paid semiannually, and a par value of$1,000. The nominal required rate of return on these bonds is7.25%. What is the bond’s intrinsic value? Enter your answerrounded to two decimal places. Do not enter $ or comma in theanswer box. For example, if your answer is $12,300.456 then enteras 12300.46 in the answer box.

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