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What is the interest rate ford is paying on borrowed funds

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Reference no: EM132121702

Question: Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual coupon payment of $150.

a. What is the interest rate Ford is paying on the borrowed funds?

b. Suppose the market interest rate rises from 3% to 4% a year after Ford issues the bonds. Will the value of the bond increase or decrease?

Reference no: EM132121702

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