Question: Tellington Inc. recently discussed issuing a 10-year-maturity bond issue with the firms investment banker. The firm was advised that it would have to pay 8

Tellington Inc. recently discussed issuing a 10-year-maturity bond issue with the firm’s investment banker. The firm was advised that it would have to pay 8 to 9 percent on the bonds. Using Figure, what does this rate suggest to you about the firm’s default rating?

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Tellington is going to issue a 10year maturity bond at about an 85 nominal rate of return Using figu... View full answer

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