Garvin, Inc.'s bonds have a par value of $1,000. The bonds pay semiannual interest of $40 and mature in five years.
a. How much would you pay for Garvin bonds if your required rate of return is 10%?
b. How much would you pay if your required rate of return is 8%?

Question

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The Answer of Garvin, Inc.'s bonds have a par value of $1,000. The bonds pay semiannual interest of $40 and mature in five years.
a. How much would you pay for Garvin bonds if your required rate of return is 10%?
b. How much would you pay if your required rate of return is 8%?