A bond with a face value of $100,000 has a coupon rate of 8 percent. The bond

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A bond with a face value of $100,000 has a coupon rate of 8 percent. The bond matures in 10 years and pays interest annually. When the bond is issued, the market rate of interest is 10 percent. What amount will investors pay for this bond when it is issued?

a. $100,000

b. $87,711

c. $49,157

d. $113,421

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Financial Accounting

ISBN: 9781264229734

11th Edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

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