Reference no: EM133041204

Question - AK is a publicly traded company with a solid credit rating, good management team, a reasonably happy customer base and is known as committed to social and environmental justice. It needs to raise money to grow so it plans to offer $10,000 par value, 10-year bonds with an 8% annual coupon rate where coupon payments will be made semi-annually. AK has a competitor named AKaA that is similar in many ways. They sold bonds last month that are now yielding their investors 7.25%.

If AK sold bonds, at what price would they expect each bond to sell (round to the nearest dollar)?

a) None of the above

b) $10,000

c) $10,521

d) $10,527