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A Firm Issues 20-Year Bonds with a Coupon Rate of 4.8%,paid

Question 33

Multiple Choice

A firm issues 20-year bonds with a coupon rate of 4.8%,paid semi-annually.The credit spread for this firm's 20-year debt is 1.2%.New 20-year Treasury notes are being issued at par with a coupon rate of 4.6%.What should the price of the firm's outstanding 20-year bonds be if their face value is $1000?


A) $882.53
B) $975.98
C) $977.48
D) $1000.86
E) $981.23

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