Chapter 7 Interest Rates and Bond Valuation Question 3 (8 marks) A company is contemplating a long term bond issue. It is debating whether or not to include a call provision. What are the benefits to the company from including a call provision? What are the costs? How do these answers change for a put provision? Question 4 (4 marks) How does a bond issuer decide on the appropriate coupon rate to set on its bonds? (2 marks) Explain the difference between the coupon rate and the required rate of return. ? (2 marks) Question 6 (3 marks) Any regular coupon bond of any maturity will sell for its face value if the coupon rate is the same as the market rate of interest. TRUE or FALSE? Explain and provide an example to support your