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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 8383 basis points left parenthesis
Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 8383 basis points left parenthesis 0.83 % right parenthesis(0.83%). Your firm's five-year debt has an annual coupon rate of 5.5 %5.5%. You see that new five-year Treasury notes are being issued at par with an annual coupon rate of 1.5 %1.5%. What should be the price of your outstanding five-year bonds?
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