You own a $1,000 Bond issued by Walmart that will mature in five years. It...
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Accounting
You own a $1,000 Bond issued by Walmart that will mature in five years. It carries a coupon (interest) rate of 4.50%. You have decided, however, that you want to sell this Bond to create some liquidity. You note that bonds with similar risk profiles are now being offered at a coupon (interest) rate of 2.75%.
Required:
Will this Bond sell for a Premium or a Discount? Why?
Calculate the sales price of the Bond. Show your work.
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