Big Time Company is planning to raise $15 million by selling 10-year bonds. The bond rating agency

Question:

Big Time Company is planning to raise $15 million by selling 10-year bonds. The bond rating agency has advised the company that the bonds will have an A rating. Currently, the difference between the yield to of A-rated corporate bonds over similar-maturity Government of Canada bonds is 150 basis points (1 basis point equals .01 percentage points). If 10-year Canada bonds are currently priced to yield 5%, what rate should Big Time select if the new issue is to sell at par value?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...