Question

# Owers Divestiture Corporation, a firm speculating in corporate reorganizations, has bonds outstanding that were originally issued...

Owers Divestiture Corporation, a firm speculating in corporate reorganizations, has bonds outstanding that were originally issued at par but are now selling, on September 1, 2002, for \$1,050 per \$1,000 face value. The bonds have a stated interest rate of 8% and mature on January 1, 2012. The bonds pay interest semi-annually on July 1 and January 1 each year. Suppose that an investor buys a \$1,000 face value bond on September 1, 2002. What dollar amount will the investor pay to the seller on September 1, 2002?

A) \$1,063.33

B) \$1,050

C)\$1,000

D)\$1,013.33

E)   none of the above.

#### Homework Answers

Answer #1

Therefore , option A is correct.

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