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Pearl Ltd Issues $8 Million in 5-Year Debentures That Pay

Question 12

Multiple Choice

Pearl Ltd issues $8 million in 5-year debentures that pay interest every 6 months at a coupon rate of 12 per cent per annum.The required market rate of return is 16 per cent per annum.What is the issue price of the debentures (rounded to the nearest dollar) ?


A) $6,926,387
B) $8,000,000
C) $9,177,614
D) $8,673,978
E) None of the given answers.

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