A 6-Year Annual Payment Corporate Bond Has a Required Return

Multiple Choice

A 6-year annual payment corporate bond has a required return of 9.5% and an 8% coupon. Its market value is $20 over its PV. What is the bond's Err?

A) 8.00%
B) 10.21%
C) 9.98%
D) 9.03%
E) 3.53% PV = 933.70 = 80  PVIFA (9.5%, 6 yrs) + 1000  PVIF (9.5%, 6 yrs) ; (933.70 + 20) = 80  PVIFA (Err, 6 yrs) + 1000  PVIF (Err, 6 yrs) , trial and error or calculator