Landirani 50% Kuchotsera
Assets, Inc., plans to issue $6 million of bonds with a coupon rate of 9 percent, a par value of $1,000, semiannual coupons, and 15 years to maturity. The current market interest rate on these bonds is 8 percent. In one year, the interest rate on the bonds will be either 12 percent or 8 percent with equal probability. Assume investors are risk- neutral.
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