IBM Is Planning to Issue $1,000 Bonds with a Stated

question 38

Multiple Choice

IBM is planning to issue $1,000 bonds with a stated interest rate of 7% and a maturity date of July 15,2022.If interest rates rise in the economy so that similar financial investments pay 9%,IBM will:

• A)not be able to issue the bonds because no one will buy them.
• B)receive a higher issue price to compensate buyers for the lower stated interest rate.
• C)have to accept a lower issue price to attract buyers.
• D)have to reprint the bond certificates to change the stated interest rate to 9%.

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