A firm has an issue of $1,000 par value bonds with a 10 percent stated interest rate outstanding. The issue pays interest annually and has 10 years remaining to its maturity date. If bonds of similar risk are currently earning 8 percent, the firm's bond will sell for ________ today.

a.

$805.20

b.

$1,268.40

c.

None of the above

d.

$1,134.20

e.

$1,000