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You are trying to calculate the cost of issuing a bond to your company prior to considering the offering expenses. The yield to maturity of

You are trying to calculate the cost of issuing a bond to your company prior to considering the offering expenses. The yield to maturity of the 10-year US Treasury is 2.90% and the yield to maturity of the five-year US Treasury is 2.75%. Your investment banker has told you that the ten-year bond will have a spread of 200 basis points and the five-year bond will have a spread of 175 basis points. Assuming that you expect the yield curve not to change in the foreseeable future which bond should your company issue?

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