Exhibit 20-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 50

Multiple Choice

Exhibit 20-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
A large grocery chain is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 6 years remaining until maturity. The bonds were issued with a 6% coupon rate (paid semiannually) and a par value of $1,000. Because of increased risk the required rate has risen to 10%.
-Refer to Exhibit 20-3. What will be the value of these securities in one year if the required return declines to 8%?

• A) $899.43
• B) $862.50
• C) $869.88
• D) $918.93
• E) $946.98

---

Definitions:

Age Structure

Distribution of population members among various age categories.

Distribution

The way in which something is shared or spread out over a certain area, or among a population.

Age Categories

Classifications of individuals based on their age, often used in statistics and research to analyze differences among age groups.

Replacement Fertility Rate

Number of children a woman must bear to replace herself with one daughter of reproductive age.