Question: USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) A large grocery chain is reevaluating its bonds since it is planning to issue a new bond

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

A large grocery chain is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 6 years remaining until maturity. The bonds were issued with a 6 percent coupon rate (paid semiannually) and a par value of $1,000. Because of increased risk the required rate has risen to 10 percent.

21. Refer to Exhibit 11.3. What is the current value of these securities?

a.	$656.40
b.	$899.00
c.	$822.70
d.	$569.50
e.	$962.00

22. Refer to Exhibit 11.3. What will be the value of these securities in one year if the required return declines to 8 percent?

a.	$899.43
b.	$862.50
c.	$869.88
d.	$918.93
e.	$946.98

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