Consider the following case of investment-grade bonds issued by Procter & Gamble Co. (P & G) in August 2011. Proctor and Gamble's total amount of debt increased from 31.9% in March 2011 to 34.2 % in December 2011, mainly due to its net debt issuances to fund general corporate purposes. What was the annual cost of the funds to P&G raised from the $1.0 billion bonds that mature in 2014? Basis points. If the bond sold at 100.10 at the time of issue, investors observed that required annual yield would be Looking at the comparable U.S Treasury yield, these bonds were issued at a spread of basis points. Because the coupon rate is the yield require by the market, the bond sold at the time of issue. If the current yield is higher than the coupon rate, would want a higher return on their investment. If the coupon rate is less than the yield required by the market, the price of the bond is most likely to be the par value of the bond, and the bond will tell at An interest rates increase, the yield required by the market will increase, and the price of the bond is likely to That when the yield increases to 1.2%, the bond's price Suppose the bond has a cell structure that allowed the company to call its bends after one year. The call structure of the bonds that the bonds would be at par. What would be the yield at call? 0.765% 1.448% 1.487% 2.193% In what situation would the company call the bond? When interest rates fall When the bond's price rises when interest rate rise When current yield on the bonds falls