7. Imperial Oil decides to raise $500 million by issuing 7-year semi-annual bonds that pay interest of 3.5% per year. If the face value is $1,000 and the current yield is 4%, what is the market price of the bond? A. $924.15 B. $969.73 C. $987.13 D. $992.35 E. $1,032.76

7. Imperial Oil decides to raise $500 million by issuing 7-year semi-annual bonds that pay interest of 3.5% per year. If the face value is $1,000 and the current yield is 4%, what is the market price of the bond? A. $924.15 B. $969.73 C. $987.13 D. $992.35 E. $1,032.76

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 10P

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Question

7. Imperial Oil decides to raise $500 million by issuing 7-year semi-annual bonds that pay
interest of 3.5% per year. If the face value is $1,000 and the current yield is 4%, what is the
market price of the bond?
A. $924.15
B. $969.73
C. $987.13
D. $992.35
E. $1,032.76

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