The 6 percent bonds of Central Gas & Electric are selling at a market price of 72,

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The 6 percent bonds of Central Gas \& Electric are selling at a market price of 72, whereas the 6 percent bonds of Interstate Power are selling at a price of 97 . Does this mean that Interstate Power has a better credit rating than Central Gas \& Electric? Explain. (Assume current long-term interest rates are in the 11 percent to 13 percent range.)

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Financial & Managerial Accounting

ISBN: 9780073526997

15th Edition

Authors: Jan Williams, Sue Haka, Mark Bettner, Joseph Carcello

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