ABC Corp'S Balance Sheet Shows Its Long-Term Debt to Be $20

question 53

Multiple Choice

ABC Corp.'s balance sheet shows its long-term debt to be $20 million.The debt was issued with a 10% interest rate,and the current interest rate is 7%.Based on this information alone,the market value of this debt is most likely:

• A) less than $20 million.
• B) more than $20 million.
• C) equal to $20 million.
• D) unknown without knowing the maturity of the debt.

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