IBM sells a 5-year, $10,000 bond that pays 8% annual interest. The amount that investors would...

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IBM sells a 5-year, $10,000 bond that pays 8% annual interest. The amount that investors would be willing to pay for the bond if the market interest rate is 10% is the present value of: Multiple Choice $14,000 where i = 8%. $10,000 plus the present value of the interest payments where i = 8%. $10,000 plus the present value of the interest payments where i = 10%. $15,000 where i = 10%. None of these IBM sells a 5-year, $10,000 bond that pays 8% annual interest. The amount that investors would be willing to pay for the bond if the market interest rate is 10% is the present value of: Multiple Choice $14,000 where i = 8%. $10,000 plus the present value of the interest payments where i = 8%. $10,000 plus the present value of the interest payments where i = 10%. $15,000 where i = 10%. None of these

Answer rating: 100% (QA)

348 answers Solution B the PV of 10000 plus Pv of interest p... View the full answer