UOP, a Petroleum Processing Technology Firm, Issued a 10% Coupon

question 62

Multiple Choice

UOP, a petroleum processing technology firm, issued a 10% coupon, 20 year to maturity first mortgage bond five years ago. If the current market rate of debt for UOP is 8%, at what price should this bond sell, to the nearest dollar? Assume a par value of $1,000 and that it pays interest semiannually.

• A) $1,170
• B) $999
• C) $1,095
• D) $1,173

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