Your company is planning to issue new bonds soon. Your boss gives you the following information and asks you to calculate the interest rate at which to issue the bonds. Given this information, what interest rate do you recommend? Expected Inflation Rate: 3% Interest rate of similar corporations' ( AAA rated) 30-year bonds: 6.5% Interest rate of 30 - Year Treasury Bonds: 5.38% Interest rate of 3 - month treasury bills: 4.89% Liquidity - risk premium: 0.03
Your company is planning to issue new bonds soon. Your boss gives you the following information
and asks you to calculate the interest rate at which to issue the bonds. Given this information, what
interest rate do you recommend? Expected Inflation Rate: 3% Interest rate of similar corporations' (
AAA rated) 30-year bonds: 6.5% Interest rate of 30 - Year Treasury Bonds: 5.38% Interest rate of 3 -
month treasury bills: 4.89% Liquidity - risk premium: 0.03 Instruction: Type ONLY your numerical
answer in the unit of dollars, NO $ sign, NO comma, and round to two decimal places. E.g., if your
answer is $7, 001.56, should type ONLY the number 7001.56, NEITHER 7,001.6, $7001.6, $7,001.6,
NOR 7002. Otherwise, Blackboard will treat it as a wrong answer.
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