A Firm Has an Issue of $1,000 Par Value Bonds

question 83

Multiple Choice

A firm has an issue of $1,000 par value bonds with a 9 percent stated interest rate outstanding. The issue pays interest annually and has 20 years remaining to its maturity date. If bonds of similar risk are currently earning 11 percent, the firm's bond will sell for ________ today.

• A) $1,000
• B) $716.67
• C) $840.73
• D) $1,123.33

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Existing but not yet developed or manifest; hidden or dormant potential or qualities not yet visible.

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