A corporate bond matures in five years it has a par value, Financial Management

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A corporate bond matures in five years it has a par value

A Corporate bond matures in five years. It has a par value of $1000 and pays a 7% annual coupon. This bond’s spread over comparable maturity Treasury Bonds is 150 basis points. Treasury bond yields are currently 2%, 4% and 6% for 2 year, 5 year and 10 year maturity bonds, respectively. What is the value of this corporate bond today?

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Financial Management: A corporate bond matures in five years it has a par value

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