A bond promises to pay 150 in 12 months the annual true


1. A project has a cost of capital of 30%. The final payoff is $250. What should it cost today?

2. A bond promises to pay $150 in 12 months. The annual true interest rate is 5% per annum. What is the bond's price today?

3. A bond promises to pay $150 in 12 months. The bank quotes you interest of 5% per annum, compounded daily. What is the bond's price today?

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Financial Management: A bond promises to pay 150 in 12 months the annual true
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