Question: A previously issued, A-rated 20-year industrial bond provides a return one-fourth higher than the prime interest rate of 9 percent. Previously issued public utility bonds

A previously issued, A-rated 20-year industrial bond provides a return one-fourth higher than the prime interest rate of 9 percent. Previously issued public utility bonds provide a yield of one-half of a percentage point higher than previously issued industrial bonds of equal quality. Finally, new issues of public utility bonds, rated A, pay three-eighths of a percentage point more than previously issued public utility bonds. What should the interest rate be on a newly issued A-rated public utility bond?

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