Your firm has a credit rating of Baa. You notice that the credit spread for five-year maturity Baa debt is 150 basis points (1.50%). Your firm is issuing a five-year 5% semiannual coupon bond. You see that new five-year Treasury notes are being issued at par with a coupon rate of 3.5%. Should your bond be issued at par, at a discount, or at a premium?

Par

Explanation:

The credit spread measures the difference between the risk free rate/ yield for a certain type of security and the yield the security offers.

The credit spread here is 1.50%.

The risk free rate is 3.5%.

The expected yield in the market for the type of security you are issuing is therefore:

= 3.5% + 1.50%

= 5.00%

Your Baa bond is expected to have a yield of 5% which is the coupon rate you are issuing it at.

Bond will therefore be issued at Par which is what happens when the Coupon and the Yield are equal.

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o

answer; niosh, the national institute for occupational safety and health;