Adonis Corporation issued 10-year, 11% bonds with a par value of $300,000. Interest is paid semiannually. The market rate on the issue date was 10%. Adonis received $318,696 in cash proceeds. Which of the following statements is true?
A. Adonis must pay $318,696 at maturity and no interest payments.
B. Adonis must pay $300,000 at maturity and no interest payments.
C. Adonis must pay $318,696 at maturity plus 20 interest payments of $16,500 each.
D. Adonis must pay $300,000 at maturity plus 20 interest payments of $15,000 each.
E. Adonis must pay $300,000 at maturity plus 20 interest payments of $16,500 each.
Answer: E
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