A Mining Company Needs to Raise $100 Million in Order

question 89

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 $1000 and a coupon rating of 6%,paid annually.The above table shows the yield to maturity for similar 30-year corporate bonds of different ratings.If the mining company's bonds receive a A rating,what will be their selling price?

• A)$947.22
• B)$967.64
• C)$1013.91
• D)$1016.41
• E)$875.91

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