On January 1, 2005, Systil Corporation Issues $50 Million, 10-Year

Multiple Choice

On January 1, 2005, Systil Corporation issues $50 million, 10-year bonds with a coupon rate of 10%. Interest is payable annually at the end of the year. If the required return on bonds of similar risk at January 1, 2006, is 8%, what will be the price of the bonds be at this date?

A) $56.71 million
B) $56.25 million
C) $44.24 million
D) $43.86 million