Disney just released $2 billion bond offerings that were issued, with each bond having a face value of $1000. The Series A bonds ($1.2 million of the offering) have a coupon rate of 3% (paid semiannually), and a maturity date of 02/01/23. The Series B bonds ($800 million) have a coupon rate of 4% (paid semiannually), and a maturity date of 02/01/28.

What can be one of the reasons that Series B bonds have a higher coupon?

A. Since the Series B is a longer term bond, it is more volatile (like a stock), so it needs to pay a higher coupon to compete with the dividend yield of the stock.

B. The Series B bonds will only be offered to institutional investors who are always given a preferential interest rate over retail investors.

C. Series B bonds have a longer maturity date, and since investors are lending money for a longer time, they will demand a higher return on their money.

D. Disney wants to attract more buyers to the Series B, and they know that after the bonds are issued and are trading, they can simply lower the coupon to the same level as the Series A bonds.