Homework Answers
F = P *(1+i)^t
Here F = 52500, P = 50000, T = 1
i = 52500 / 50000 - 1
= 1.05 - 1
= 0.05 = 5%
Interest rate on corporation bond = 20% + 5% = 25%
Price of corporation bond = 45000 / (1+0.25) = 45000 / 1.25 = 36000
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