Question

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.

  

Answer 1

Therefore , option A is correct.