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The interest rate used to discount the cash flows associated with a bond is:

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The interest rate used to discount the cash flows associated with a bond is:

 Options:

A. the required rate of return on the firm’s equity
B. the yield to maturity
C. the prime rate
D. the government T-bill rate

 

The Correct Answer Is:

  • B. the yield to maturity

 

Conclusion

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