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Your firm has a credit rating of BBB. You notice that the credit spread for 10-year maturity debt is 120 basis points. Your firms 10-year

  1. Your firm has a credit rating of BBB. You notice that the credit spread for 10-year maturity debt is 120 basis points. Your firms 10-year debt has a coupon rate of 6%. You see that new 10-year Treasury notes are being issued at par with a coupon rate of 2%. What should the price of your outstanding 10-year bonds be? Show your calculations.

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