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Aloysius Industries wishes to issue a 10-year bond. The company currently has an 9-year, semiannual coupon bond outstanding with a 12% coupon rate that is

Aloysius Industries wishes to issue a 10-year bond. The company currently has an 9-year, semiannual coupon bond outstanding with a 12% coupon rate that is trading at 113.60. There is no 9-year government bond to use as a benchmark; however, the 7-year and 10-year government bonds currently yield 4.12% and 4.35%, respectively.

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