What coupon rate should be set on its bonds

Assignment Help Finance Basics

Reference no: EM13261003

A business wants to raise $1.2 million by selling some coupon bonds at par. Comparable bonds in the market have a 6.5 percent annual coupon, 15 years to maturity, and are selling at 97.687 percent of par. What coupon rate should be set on its bonds?

6.25 percent
6.38 percent
6.50 percent
6.67 percent
6.75 percent

Reference no: EM13261003

Questions Cloud

What is the angle of telescopic image : A small telescope has a concave mirror with a 4.00-m radius of curvature for its objective. Its eyepiece is a 4.25-cm focal length lens. What is the angle of its telescopic image?

Find the no load speed-stalled torque and stalled current : The resistance of the coil is 0.2 ohm. The inductance of the coil is 1.2e-4 H. The rotor inertia is 1.0e-5 kg m2. The current to torque gain is 0.03 Nm/A. The friction torque is 0.09 Nm. A 12 V voltage source is applied to the motor.

What was the 2008 operating income and net income : What was the 2008 operating income and net income? What was operating return on assets and return on equity? Assume that interest must be paid on all of the debt.

Determine length of the barrel of the telescope : The telescope at a small observatory has objective and eyepiece focal lengths respectively of 20.0 m and 12 cm. determine length of the barrel of the telescope

What coupon rate should be set on its bonds : A business wants to raise $1.2 million by selling some coupon bonds at par. Comparable bonds in the market have a 6.5 percent annual coupon, 15 years to maturity, and are selling at 97.687 percent of par. What coupon rate should be set on its bond..

Derive the equations for the dynamic model for the motor : The resistance of the coil is .4 ohm. The inductance of the coil is 2.4e-4 H. The rotor inertia is 2.0e-5 kg m2. The current to torque gain is 0.06 Nm/A. The friction torque is 0.18 Nm. A 12 V voltage source is applied to the motor.

A remaining solution shows a yellow color in a flame test : After filtering off this precipitate, the pH is adjusted to 8 and H2S is again added; no precipitate forms. No precipitate forms upon addition of (NH4)2HPO4. The remaining solution shows a yellow color in a flame test. Based on these observations,..

Determine the net present value of the new machine : Determine the net present value of the new machine. Should they purchase the new machine?

What must the magnitude of the charge in micro coulombs : The space between the plates is then filled with a dielectric material, with dielectric constant k = 6.55. What must the magnitude of the charge in micro coulombs on each capacitor plate now be, to produce the same potential difference between the..

User Account

All Pages