14.3 Because the coupon on floating-rate debt adjusts periodically to current market conditions, the bondholder is less

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14.3 Because the coupon on floating-rate debt adjusts periodically to current market conditions, the bondholder is less vulnerable to changes in market yields. The coupon rate paid by the bond is not locked in for as long a period of time. Therefore, prices of floaters should be less sensitive to changes in market interest rates.

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Fundamentals Of Corporate Finance

ISBN: 9780073382302

6th Edition

Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus

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