An individual investor considers investing in SpriggsCorporation and decides not

Question

An individual investor considers investing in SpriggsCorporation and decides not to purchase the bond. Which of the following statements ismost correct?

a. The intrinsic value of the bond for the investor is less than the market value of the bond.

b. The liquidation value of the bond is greater than the market value of the bond.

c. The intrinsic value of the bond forthe investor is less than the par value of the bond.

d. The intrinsic value ofthe bond for the investor is greater than the book value of the bond.

Explanation / Answer

a. The intrinsic value of the bond for the investor is less than the market value of the bond.

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