Question: Exhibit 11.1 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) A major retailer is reevaluating its bonds since it is planning to issue a new

Exhibit 11.1 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) A

Exhibit 11.1 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) A major retailer is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 8 years remaining until maturity. The bonds were issued with a 6.5 percent coupon rate (paid quarterly) and a par value of $1,000. The required rate of return is 4.25 percent. 1. Refer to Exhibit 11.1. What is the current value of these securities? a. $1149.94 b. $433.15 c. $1151.92 d. $860.50 e. $863.35

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