UOP, a Petroleum Processing Technology Firm, Issued a 10% Coupon

Multiple Choice

UOP, a petroleum processing technology firm, issued a 10% coupon, 20 year to maturity first mortgage bond five years ago. If the current market rate of debt for UOP is 8%, at what price should this bond sell, to the nearest dollar? Assume a par value of $1,000 and that it pays interest semiannually.

A) $1,170
B) $999
C) $1,095
D) $1,173