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Business, 30.07.2019 23:20 sugaree95

Kic, inc., plans to issue $4 million of bonds with a coupon rate of 7 percent and 10 years to maturity. the current market interest rates on these bonds are 6 percent. in one year, the interest rate on the bonds will be either 12 percent or 6 percent with equal probability. assume investors are risk-neutral. if the bonds are noncallable, what is the price of the bonds today?

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