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A 10-year, annual payment corporate coupon bond has an expected return of 11 percent and a required return of 10 percent. The bond's market price is: A) greater than its present value. B) less than par. C) less than its expected rate or return. D) less than its present value. E) $1,000.00.

A 10-year, annual payment corporate coupon bond has an expected return of 11 percent and a required return of 10 percent. The bond's market price is: A) greater than its present value. B) less than par. C) less than its expected rate or return. D) less than its present value. E) $1,000.00.

Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance
Section: Chapter Questions
Problem 13PAE
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A 10-year, annual payment corporate coupon bond has an expected return of 11 percent and a required return of 10 percent. The bond's market price is:               

  1. A) greater than its present value.
  2. B) less than par.
  3. C) less than its expected rate or return.
  4. D) less than its present value.
  5. E) $1,000.00.
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