One Year Ago Lerner and Luckmann Co

question 95

Multiple Choice

One year ago Lerner and Luckmann Co.issued 15-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000.Today, the market interest rate on these bonds is 5.5%.What is the current price of the bonds, given that they now have 14 years to maturity?

• A) $1,077.01
• B) $1,104.62
• C) $1,132.95
• D) $1,162.00
• E) $1,191.79

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