AAA Security: Corporate Yield (%): 6.2 AA Corporate 6.4 A Corporate 6.7 BBB Corporate 7.0 BB Corporate 7.5 Consolidated Insurance wants to raise $35 million in order to build a new headquarters. The company will fund this by issuing 10-year bonds with a face value of $1,000 and a coupon of 6.3%, paid semiannually. The above table shows the yield to maturity for similar 10-year corporate bonds of different ratings. Which of the following is closest to how many more b Consolidated Insurance would have to sell to raise this money if their bonds received an Ar rather than an AA rating?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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65)
AAA
Security: Corporate
Yield (%): 6.2
A) 937 bonds
B) 1093 bonds
AA
Corporate
C) 781 bonds
D) 625 bonds
6.4
A
Corporate
6.7
BBB
Corporate
17.0
BB
Corporate
Consolidated Insurance wants to raise $35 million in order to build a new headquarters. The
company will fund this by issuing 10-year bonds with a face value of $1,000 and a coupon rate
of 6.3%, paid semiannually. The above table shows the yield to maturity for similar 10-year
corporate bonds of different ratings. Which of the following is closest to how many more bonds
Consolidated Insurance would have to sell to raise this money if their bonds received an A rating
rather than an AA rating?
7.5
Transcribed Image Text:65) AAA Security: Corporate Yield (%): 6.2 A) 937 bonds B) 1093 bonds AA Corporate C) 781 bonds D) 625 bonds 6.4 A Corporate 6.7 BBB Corporate 17.0 BB Corporate Consolidated Insurance wants to raise $35 million in order to build a new headquarters. The company will fund this by issuing 10-year bonds with a face value of $1,000 and a coupon rate of 6.3%, paid semiannually. The above table shows the yield to maturity for similar 10-year corporate bonds of different ratings. Which of the following is closest to how many more bonds Consolidated Insurance would have to sell to raise this money if their bonds received an A rating rather than an AA rating? 7.5
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