Question
A firm issues two-year bonds with a coupon rate of 6%, paid semiannually. The credit spread for this firm's two-year debt is 0.8%. New two-year
A firm issues two-year bonds with a coupon rate of 6%, paid semiannually. The credit spread for this firm's two-year debt is 0.8%. New two-year Treasury notes are being issued at par with a coupon rate of 4%. What should the price of the firm's outstanding two-year bonds be per $100 of face value?
A= $122.72
B=$102.26
C=143.17
D=81.81
Which is the correct answer ?
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Cost Benefit Analysis
Authors: Harry F. Campbell, Richard P.C. Brown
3rd Edition
1032320753, 9781032320755
