Question: our company is going to issue a 16 year regular bond. The Government of Canada recently issued a 16 year regular bond at par. The

our company is going to issue a 16 year regular bond. The Government of Canada recently issued a 16 year regular bond at par. The Government bond had a coupon rate of 11.0%.The term structure of interest rates is flat. Your company has a default risk premium of 1.4%. Assuming your firm wishes to issue the new bond at par, what will be the coupon rate.

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