(a) Suppose the company is thinking of issuing bonds. It collects data on comparable companies to determine how to price its bonds. What criteria determine whether these companies’ bonds are comparable, and what measure would you use to price the company’s bonds?

(b) You are looking at the following 3 companies as candidates for the comparison in part (c). Which company is most likely to be a comparable company? Company 

A: 4% coupon rate, 10% YTM Company 

B: 2% coupon rate 11% YTM Company 

C: 5% coupon rate 7% YTM

Answer rating: 100% (QA)

a In order to determine the price of their bonds the company must collect data for their comparable ... View the full answer