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Stech Co Is Issuing $6

question 103

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Stech Co. is issuing $6.5 million 12% bonds in a private placement on July 1, 2019. Each £1,000 bond pays interest semi-annually on December 31 and June 30 of each year. The bonds mature in ten years. At the time of issuance, the market interest rate for similar types of bonds was 8%. What is the expected selling price of the bonds?


Definitions:

Standard Deviation

A quantitative indicator that calculates the degree of spread or variability among a collection of data points.

Expected Rate

The anticipated return on an investment over a specific period.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of numerical data from its mean.

Zero Standard Deviation

A statistical measure indicating that all values within a data set are identical.

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