1. EAC Nutrition offers a 8.5 percent coupon bond with annual payments, maturing 11 years from today. Your required return is 11.2 percent. What price are you willing to pay for this bond if the face (or par) value is $1,000?

$953.30

$812.44

$833.92

$895.43

$869.27

2. Ginormous Oil entered into an agreement to purchase all of the outstanding shares of Slick Company for $50 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of liabilities on the balance sheet of Slick Co. was $1.46 billion. What was the cost of this acquisition to the shareholders of Ginormous Oil?

$6.38 billion

$2.46 billion

$7.86 Billion

$5.56 Billion

$3.46 Billion