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A firms bonds were selling at par value but have recently gone up in value and now sell at a significant premium? Which of the
A firms bonds were selling at par value but have recently gone up in value and now sell at a significant premium? Which of the following could cause this?
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Investors perceive that the firms risk profile has increased significantly.
The firm recently announced it would be issuing much more debt in order to buy back common stock.
Investors perceive that the firms risk profile has decreased significantly.
The general level of interest rates in the economy have gone up significantly.
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