Question: A previously issued A-rated 15-year industrial bond provides a return three-fourth higher than the prime interest rate of 8 percent. Previously issued public utility bonds

A previously issued A-rated 15-year industrial bond provides a return three-fourth higher than the prime interest rate of 8 percent. Previously issued public utility bonds provide a yield of three-fourth of a percentage point higher than previously issued industrial bonds of equal quality. Finally, new issues of public utility bonds, rated A, pay one-half 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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