\\ISSUE = 10. OOO,400 Of 10 - year bonds with a coupon rate of 4%, interest payable Semiannually! Although the current market rate 15 476, based on current Economic forecasts , Zeller and Merkel RECOGNIZE that market rates might increase to $26 by the time they issue the bonds. Although they do not like the option of added debt , they feel it is a reasonable alternative and should be considered . HOWEver, they are not clear on the implications that this bond issue would have on the company and it financial Statements , including the impact of the possibility that interest rates might increase by the time the bonds could be actually issued