Multiple Choice
$2 million, 6%, 10-year bonds are issued when the market rate is 8%. Interest will be paid quarterly. When calculating the issue price of the bond, the interest rate to be used to calculate the present value of the face amount and the present value of the periodic interest payments is
A) 4%.
B) 8%.
C) 6%.
D) 2%.
Correct Answer:
Verified
Correct Answer:
Verified
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