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UOP, a Petroleum Processing Technology Firm, Issued a 10% Coupon

Question 112

Multiple Choice

UOP, a petroleum processing technology firm, issued a 10% coupon, 20 year to maturity first mortgage bond five years ago.If the current market rate of debt for UOP is 8%, at what price should this bond sell, to the nearest dollar? Assume a par value of $1,000, and pays interest semi-annually.


A) $1,170.
B) $999
C) $1,095
D) $1,173

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