A Mining Company Needs to Raise $100 Million in Order

question 35

Multiple Choice

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

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Definitions:

Upward Mobility Rate

The frequency or likelihood with which individuals in an organization or society can ascend to higher social or economic positions.

Promotion Rate

The frequency at which employees are elevated to higher positions within an organization, indicative of career development opportunities.

Long Telegram

A 1946 document sent by George Kennan from the United States Embassy in Moscow to Washington, outlining the Soviet Union's post-World War II behavior and recommending a strategy of containment.

George F. Kennan

An American diplomat and historian, recognized as the "father" of the containment policy, which aimed to prevent the spread of communism during the Cold War.