The bonds of Columbia Gas paid no interest in 1993 because the firm had declared bankruptcy One issue of these bonds, the 8 percent coupon bonds due in 1996, was selling at 109 percent of par value, or for approximately $1,090 Why would someone pay $1,090 for the bonds of a bankrupt firm ...

Bondholders would be willing to pay more for a bankrupt company bonds because of ...

The bonds of Columbia Gas paid no interest in 1993 because the firm had declared bankruptcy. One

Question:

The bonds of Columbia Gas paid no interest in 1993 because the firm had declared bankruptcy. One issue of these bonds, the 8¼ percent bonds due in 1996, was selling at 109 percent of par value, or for approximately $1,090. Why would someone pay $1,090 for the bonds of a bankrupt firm?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...