WXAM Has an Outstanding Bond Issue with a Coupon Rate

question 22

Multiple Choice

WXAM has an outstanding bond issue with a coupon rate of 6 1/8% and a current yield of 6.9%. The yield to maturity on this bond is 7 5/8%. What is the market price of this bond if it pays interest semi-annually and has 12 years to maturity?

• A) $883.42
• B) $937.45
• C) $943.65
• D) $1,000.00

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Definitions:

Inventory

The raw materials, work-in-progress products, and finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale.

Price Decline

Price decline refers to a decrease in the value or cost of an asset or commodity over a period, often influenced by market conditions or changes in supply and demand.

Write Down

The reduction in the book value of an asset when its fair market value has fallen below its current book value.

Accountants

Professionals who perform accounting functions such as audits or financial statement analysis according to prescribed methods.