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Higher Credit Rating Assignment | Homework For You

3. Suppose you can buy a $1,000 face value bond from ABC Corp. This bond pays a 3.2% coupon Rok semi-annually and matures in 10 years. Suppose you could also buy a $1,000 face value bond from ACME Inc. Homework For YouThis bond pays a 5.8% coupon semi-annually for 10 years. Tell me what the risk premium is (hint: tell me the difference in PV). In both cases, use 4.5% for discounting. Which company probably has the higher credit rating? Why? Get Finance homework help today

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