Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 89 basis points (0.89%). Your firm's five-year has semi-annual coupons and a coupon rate of 4%. You see that new five-year Government of Canada bonds are being issued with a YTM of 2%. What should the price of your outstanding five-year bonds be? Assume a par value of $100. --- The price of your outstanding five-year bonds should be $ (Round to the nearest cent.)

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
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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 89 basis points
(0.89%). Your firm's five-year has semi-annual coupons and a coupon rate of 4%. You see that new five-year
Government of Canada bonds are being issued with a YTM of 2%. What should the price of your outstanding five-year
bonds be? Assume a par value of $100.
The price of your outstanding five-year bonds should be $
(Round to the nearest cent.)
View an example Get more help -
Clear T
Transcribed Image Text:Your firm has a credit rating of A. You notice that the credit spread for five-year maturity A debt is 89 basis points (0.89%). Your firm's five-year has semi-annual coupons and a coupon rate of 4%. You see that new five-year Government of Canada bonds are being issued with a YTM of 2%. What should the price of your outstanding five-year bonds be? Assume a par value of $100. The price of your outstanding five-year bonds should be $ (Round to the nearest cent.) View an example Get more help - Clear T
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