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Pearl Ltd Issues $8 Million in 5-Year Debentures That Pay

Question 40

Multiple Choice

Pearl Ltd issues $8 million in 5-year debentures that pay interest every 6 months at a coupon rate of 12% per annum.The required market rate of return is 16% per annum.What is the issue price of the debentures (rounded to the nearest dollar) ?


A) $6 926 387
B) $8 000 000
C) $9 177 614
D) $8 673 978

Correct Answer:

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