A Mining Company Needs to Raise $100 Million in Order

A mining company needs to raise $100 million in order to begin open-pit mining of a coal seam. The company will fund this by issuing 30-year bonds with a face value of $1,000 and a coupon rate of 6.5%, paid annually. The above table shows the yield to maturity for similar 30-year corporate bonds of different ratings. If the company's bonds are rated A, what will be their selling price?

A) $1265.37
B) $1476.27
C) $1054.48
D) $843.58

Correct Answer:

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