Question
Adonis Corporation issued 10-year, 11% bonds with a par value of $170,000. Interest is paid semiannually. The market rate on the issue date was 10%.
| Adonis Corporation issued 10-year, 11% bonds with a par value of $170,000. Interest is paid semiannually. The market rate on the issue date was 10%. Adonis received $180,595 in cash proceeds. Which of the following statements is true? |
A. Adidas must pay $170,000 at maturity plus 20 interest payments of $9,350 each.
B. Adidas must pay $170,000 at maturity plus 20 interest payments of $8,500 each.
C. Adidas must pay $180,595 at maturity plus 20 interest payments of $9,350 each.
D. Adidas must pay $170,000 at maturity and no interest payments.
E. Adidas must pay $180,595 at maturity and no interest payments.
Please add explanation
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