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It is 2030 and the yields on corporate bonds are as follows: Aaa A Ba 8.05% 10.05% 12.05% Tau Corp wishes to raise $20 million
It is 2030 and the yields on corporate bonds are as follows:
Aaa | A | Ba |
8.05% | 10.05% | 12.05% |
Tau Corp wishes to raise $20 million by an issue of 9% 10-year bonds. Assume a face value of $100. What will be the likely issue price (as a percent of face value) if Tau is rated (a) Aaa, (b) A, or (c) Ba? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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