A Firm Issues 5-Year Bonds with a Coupon Rate of 4.7

question 76

Multiple Choice

A firm issues 5-year bonds with a coupon rate of 4.7%, paid semiannually. The credit spread for this firm's 5-year debt is 1.2%. New 5-year Treasury notes are being issued at par with a coupon rate of 5.1%. What should the price of the firm's outstanding 5-year bonds be if their face value is $1,000?

• A) $932.28
• B) $12.00
• C) $1305.19
• D) $745.82

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