a)

b)

please explain why the answer is the answer. thank you in advance!

You are planning to borrow $10,000 today. You are evaluating choices of lenders; the lenders offer different interest rates and time when you need to pay. Given all else equal, You would prefer to pay a lower rate of interest. You would prefer to pay $20,000 in ten years than $12,000 in ten years. You would prefer to pay a high rate of interest on the money borrowed rather than a lower rate. You will pay back less than $10.000. If you have to pay $15,000 to the bank, you would prefer to pay this money in one year rather than paying $15,000 in ten years. Improving company is becoming less risky and more stable. It has bonds outstanding. Which of the following would you expect given Improving company has lowered its risk of default? Assume all other factors such as overall market factors are constant. The yields to maturity of existing bonds would decrease. The price of the existing bonds would decrease. The overall interest rates on the bond would increase. O The coupon rates on existing bonds would decrease. The par value of the existing bonds would increase