The issue pays interest annually

Reference no: EM131031428

1. A firm has an issue of $1,000 par value bonds with a 12 percent stated interest rate outstanding. The issue pays interest annually and has 10 years remaining to its maturity date. If bonds of similar risk are currently earning 8 percent, the firm's bond will sell for ________ today.

a. $1,268.40
b. $805.20
c. $1,000
d. $1,115.50

Reference no: EM131031428

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