Hewitt Packing Company Has an Issue of $1,000 Par Value

Multiple Choice

Hewitt Packing Company has an issue of $1,000 par value bonds with a 14 percent annual couponinterest rate. The issue has ten years remaining to the maturity date. Bonds of similar risk arecurrently selling to yield a 12 percent rate of return. The current value of each Hewitt bond is __________.

A) $1,052
B) $791
C) $1,113
D) $1,000