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07-53. Coupon Rate versus Effective Rate Assume that you are the CFO of a company that intends to issue bonds to finance a new manufacturing

07-53. Coupon Rate versus Effective Rate Assume that you are the CFO of a company that intends to issue bonds to finance a new manufacturing facility. A subordinate suggests lowering the coupon rate on the bond to lower interest expense and to increase the profitability of your company. Is the rationale for this suggestion a good one? Explain

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