Recycler Battery Corporation (RBC) issued zero coupon bonds 5 years ago at a price of $214.50 per bond. RBC's zeros had a 20-year original maturity, with a $1,000.00 par value. The bonds were callable 10 years after the issue date at a price 8% over their accrued value on the call date. If the bonds sell for $235.00 in the market today, what annual rate of return should an investor who buys the bonds today expect to earn on them?
A. 9.63%
B. 11.76%
C. 10.03%
D. 9.73%
E. 10.14%
Answer: E
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