Suppose the finance manager of ABC Company suggests either issuing bonds or shares to raise...
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Finance
Suppose the finance manager of ABC Company suggests either issuing bonds or shares to raise capital for the development of an environmental-friendly production technique. Assuming there is no fees or costs for the securities.
B) (i) Suppose ABC Company plans to issue bonds with $10,000 par value, 7 years of term to maturity, 5.5% coupon to be paid quarterly, investors require 6% of return on the bond with similar risk. Calculate the price of the bonds. Will the bond sell at par, discount or premium? Explain.
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