Your firm has a credit rating of A. You notice that the credit spread for five-year...

Question

Question

Your firm has a credit rating of A. You notice that the credit spread for five-year...

Your

firm has a credit rating of A.

You

notice

that the credit spread for

five-year

maturity A debt is

85

basis points

left parenthesis 0.85 % right parenthesis .(0.85%).

Your

firm's

five-year

has semi-annual coupons and a coupon rate of

6%.

You

see

that new

five-year

Government of Canada bonds are being issued with a

YTM

of

3%.

What should the price of

your

outstanding

five-year

bonds be? Assume a par value of

$100.

business finance

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Answer 1

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE e v ( 02:03 ENG 05-03-207022 BV398 x x BQ BR BS BT BUBV B W BX BY 381 382 383 BOND BA II PLUS set C/Y = P/Y = 384 385 386 387

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Answer 2

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