Use the Information for the Question(s)below

question 5

Multiple Choice

Use the information for the question(s) below.
-A firm issues 20-year bonds with a coupon rate of 4.8%, paid semi-annually. The credit spread for this firm's 20-year debt is 1.2%. New 20-year Treasury bonds are being issued at par with a coupon rate of 4.6%. What should the price of the firm's outstanding 20-year bonds be if their face value is $1 000?

• A)$882.53
• B)$975.98
• C)$1 000.86
• D)$977.48

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Definitions:

Social Status

The position or rank of a person or group within the social hierarchy, often influencing power, prestige, and access to resources.

Diffusion of Innovation

The process by which a new idea, product, or behavior spreads through a population or social system.

Diffusion of Innovation

A theory that explains how, why, and at what rate new ideas and technology spread through cultures or social systems.

Informal Social Contacts

The interactions that occur between individuals in a casual, unstructured setting, outside of formal organizational or institutional contexts.