value of the above securities.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 15P
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  1. Rose Gardens can issue bonds with a par value of the bond is $1,000 offering a coupon rate of 6%. Interest is expected to be paid annually. These bonds will mature in 5 years.  Administrative fees will be $15.

Calculate the value of the above securities. Keep in mind that the expected rate of return for all securities mentioned above is 7%.

Make sure to support your answer with workings and explanations.  Tax rate is 30%

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