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Please help Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 87 basis points
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Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 87 basis points (0.87%). Your firm's five-year debt has an annual coupon rate of 5.8%. You see that new five-year Treasury notes are being issued at par with an annual coupon rate of 1.6%. What should be the price of your outstanding five-year bonds? Assume $1,000 face value. Assuming a $1,000 face value, the price of the bond is $. (Round to the nearest cent.)Step by Step Solution
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