A bond issue with a face amount of $900,000 bears interest at the rate of 10%....

Question

Question

A bond issue with a face amount of $900,000 bears interest at the rate of 10%. The current market rate of interest is 11%. Th

Answer 1

Answer #1

Option C is the answer

The bond will be sold at a price lower than 900,000 as the interest rate of bond (10%) is lower than the current market rate of interest which is 11%.

Answer 2

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