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Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?

Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 6PROB
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24. Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?
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