A major retailer is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 8 years remaining until maturity. The bonds were issued with a 6.5 percent coupon rate (paid quarterly) and a par value of $1,000. The required rate of return is 4.25 percent. Please, answer the following two questions:

1. Refer to Exhibit 11.1 in the book. What is the current value of these securities?

a.	$1149.94
b.	$433.15
c.	$1151.92
d.	$860.50
e.	$863.35

$860.50

$863.35