Exhibit 11.2 Use the Information Below for the Following Problem(S)

question 65

Multiple Choice

Exhibit 11.2
Use the Information Below for the Following Problem(S)
A major manufacturer is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 7 years remaining till maturity. The bonds were issued with an 8 percent coupon rate (paid quarterly) and a par value of $1,000. The required rate of return is 10 percent.
-Refer to Exhibit 11.2.What will be the value of these securities in one year if the required return is 6 percent?

• A) $1151.92
• B) $972.52
• C) $1100.15
• D) $900.18
• E) $936.72

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Definitions:

Creativity

The capacity to generate unique and novel concepts, or to create something innovative and imaginative.

Feedback

Information provided regarding aspects of one's performance or understanding, intended to guide future improvements.

Manager

A person responsible for controlling or administering an organization or group of staff, making decisions regarding its operations.

Coworkers

Individuals who work together in the same organization or on the same team but do not necessarily have the same rank or position.