You Are Considering Buying a 10-Year, $1,000 Par Value Bond

Multiple Choice

You are considering buying a 10-year, $1,000 par value bond issued by IBM. The coupon rate is 8% annually, with interest being paid semiannually. If you expect to earn a 10% rate of return on this bond, what is the maximum price you should be willing to pay for this IBM bond?

A) $189.93
B) $875.39
C) $898.54
D) $911.46