Sykora Corp

Multiple Choice

Sykora Corp. sells $450,000 of bonds to private investors. The bonds are due in 5 years, have a 6% coupon rate and interest is paid semiannually. Sykora received $490,222 for the bonds at issuance.
The effective rate on these bonds is:

A) 6%
B) 9%
C) 4%
D) 10%
E) None of the above