Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays
Chapter 17, Problem 38(choose chapter or problem)
Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual coupon payment of $150. a. What is the interest rate Ford is paying on the borrowed funds? b. Suppose the market interest rate rises from 3% to 4% a year after Ford issues the bonds. Will the value of the bond increase or decrease?
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