Exhibit 20-3 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

Exhibit 20-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
A large grocery chain is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 6 years remaining until maturity. The bonds were issued with a 6% coupon rate (paid semiannually) and a par value of $1,000. Because of increased risk the required rate has risen to 10%.
-Refer to Exhibit 20-3. What will be the value of these securities in one year if the required return declines to 8%?

A) $899.43
B) $862.50
C) $869.88
D) $918.93
E) $946.98