Suppose it is January 1, 2024 and you buy a bond issued by Megacorp Corporation....
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Suppose it is January 1, 2024 and you buy a bond issued by Megacorp Corporation. The bond has a face value of $10,000 and matures on December 31, 2028. Each January 1 it pays an 11.25% coupon, but a bond issued by an identical company with the same credit risk and same time to maturity is only yielding 8.73%. How much should you expect to pay for this bond
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