Determine approximate rate they would need to pay investors

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Reference no: EM13875246

Market Enterprises would like to issue bonds and needs to determine the approximate rate they would need to pay investors. A firm with similar risk recently issued bonds with the following current features a 5% coupon rate, 10 years until maturity, and a current price of $1,150. At what rate would Market Enterprises expect to issue their bonds, assuming annual interest payments?

A. 3.2%

B. 5.9%

C. 5%

D. 4.8%

Please explain solution in detail and what formula (if any) you are using to find answer.

Reference no: EM13875246

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