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Ch. 10 Quiz

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Item6

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Time Remaining 1 hour 22 minutes 21 seconds

01:22:21

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Item 6

Item 6 1 points

Time Remaining 1 hour 22 minutes 21 seconds

01:22:21

Adonis Corporation issued 10-year, 8% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 7.5%. Adonis received $206,948 in cash proceeds. Which of the following statements is true?

Multiple Choice

• Adonis must pay $206,948 at maturity plus 20 interest payments of $8,000 each.

• Adonis must pay $200,000 at maturity and no interest payments.

• Adonis must pay $200,000 at maturity plus 20 interest payments of $7,500 each.

• Adonis must pay $200,000 at maturity plus 20 interest payments of $8,000 each.

• Adonis must pay $206,948 at maturity and no interest payments.