Tony's Pizzeria Plans to Issue Bonds with a Par Value

Multiple Choice

Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold at net $937.79. What is the yield to maturity (YTM) of the issue as a broker would quote it to an investor?

A) 11%
B) 10%
C) 9%
D) 8%
E) 7%