Question
Use the following information to answer the question(s) below. Security Term (years) Yield (%) Treasury 20 5.5% AAA Corporate 20 7.0% BBB Corporate 20 8.0%
Use the following information to answer the question(s) below.
| Security | Term (years) | Yield (%) |
| Treasury | 20 | 5.5% |
| AAA Corporate | 20 | 7.0% |
| BBB Corporate | 20 | 8.0% |
| B Corporate | 20 | 9.6% |
Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to:
| $901 | |
| $1000 | |
| $800 | |
| $891 |
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Fundamental Accounting Principles Volume II
Authors: Larson Kermit, Jensen Tilly
14th Canadian Edition
71051570, 0-07-105150-3, 978-0071051576, 978-0-07-10515, 978-1259066511
