KIC Inc. plans to issue $5.0 million of bonds with a coupon rateof 10 percent paid semiannually and 30 years to maturity. Thecurrent one-year market interest rate on these bonds is 9 percent.In one one-year market interest rate on these bonds is 9 percent. In one year, the interest rate on the bonds will be either 12 percent or 6 percent with equal probability. Assume investors are risk neutral. 2 answers