A firm issues ten-year bonds with a coupon rate of 6.8%, paid semiannually. The credit spread for this firm's ten-year debt is 0.8%. New ten-year Treasury notes are being issued at par with a coupon rate of 3.7%. What should the price of the firm's outstanding ten-year bonds be per $100 of face value? OA. $165.70 OB. $94.69 OC. $118.36 OD. $142.03

A firm issues ten-year bonds with a coupon rate of 6.8%, paid semiannually. The credit spread for this firm's ten-year debt is 0.8%. New ten-year Treasury notes are being issued at par with a coupon rate of 3.7%. What should the price of the firm's outstanding ten-year bonds be per $100 of face value? OA. $165.70 OB. $94.69 OC. $118.36 OD. $142.03

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 16P

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Question

Ef 492.

A firm issues ten-year bonds with a coupon rate of 6.8%, paid semiannually. The credit spread for this firm's ten-year
debt is 0.8%. New ten-year Treasury notes are being issued at par with a coupon rate of 3.7%. What should the price of
the firm's outstanding ten-year bonds be per $100 of face value?
OA. $165.70
OB. $94.69
OC. $118.36
OD. $142.03
REED

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