Exhibit 20-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 31

Multiple Choice

Exhibit 20-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
A major manufacturer is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 7 years remaining till maturity. The bonds were issued with an 8% coupon rate (paid quarterly) and a par value of $1,000. The required rate of return is 10%.
-Refer to Exhibit 20-2. What will be the value of these securities in one year if the required return is 6%?

• A) $1151.92
• B) $972.52
• C) $1100.15
• D) $900.18
• E) $936.72

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Definitions:

Job Security

The chance or likelihood of a person maintaining their employment without facing the possibility of losing their job.

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The degree of independence and self-direction that an individual or entity possesses.

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The feeling or condition of having obligations or duties as a result of one's actions or roles gained through experience.

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