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Deere and company's 2 0 1 5 1 0 - K reports the following footnote relating to long - term debt for its equipment operations

Deere and company's 201510-K reports the following footnote relating to long- term debt for its equipment operations subsidiary. Deeres borrowings include $300 million, 7.125% notes, due in 2031(bolded below). Long term borrowings at October 31 consisted of the following in millions of dollars: a recent price quote from Yahoo Finance Bond Center on Deete's 7.125% note follows: 1. assuming that these notes were originally issued at par value what does the market price reveal about interest rate changes since Deere issued its notes (assume that deeres credit rating has remained the same)(A: interest rates have remained the same, B: there is not enough information, C: interest rates have increased, D: interest rates have declined)2. Does the change in interest rates since the issuance of these nktes affect the amount of interest expense that deere reports in its income statement? Explain. (A: yes the decline in interest rates results in a decline in interest expense, B: because accounting is inherently conservative declined in interest rates are not reflected in a reduction of interest expense. However, the increase in interest expense resulting from an increase in rates is recognized, C: no the change in interest rates since deere issued the notes does not affect interest expense, D: the change in interest rates only affectd the required payment on the liability and thus cash flow
3. How much cash would deere have to pay to repurchase the 7.125% notes as the quoted market price of 142.72(assume no interest is owned when deere repurchases the notes) round your answers to two decimal places.
4. How would the repurchase affects deeres current income? (A: the repurchase would result in a loss on repurchase of debentures, which would lower current pre tax income, B: cash and bonds payable both decrease by the sane amount no gain or loss is recognized, C: the repurchase only affects cash flow not income, D: income is not affected the liability has been reported at fair value since inception. As a result the repurchase price is equal to the book value and no gain or loss is recognized)
5. Assuming that the notes remain outstanding until their maturity, at what market price will the notes sell on their due date in 2031?
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