Use a 10% Coupon bond with semiannual payments and a 20 year maturity. 1000 par.
After five years the issuing firm of the coupon bond is in financial distress, if the coupons are guaranteed but the principal payment is expected to only have 20% of it paid back. If investors expect a 10% expected yield to maturity, at what price will this bond sell at time 5 years?
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