The new issue $1,000 face value bonds due in 2030 issued by Bathtub Brewing Company are seen by investors as less attractive than other bonds offered by other businesses at the same time. The coupon rate attached to these bonds will need to be ________ than other corporate bond issues in order to attract investors.

Question

Quizplus · Accepted Answer

In order to attract investors to bonds with poor ratings and a high risk of default, corporations must attach a high interest rate to the bond.

The New Issue $1,000 Face Value Bonds Due in 2030