Problem
A new manufacturing company will issue bonds amounting to IDR 25 billion for the first time with a term of 3 years and coupons are paid annually. Currently, the yield on corporate bonds with the same asset size as the company is 5% pa (tenor of 3 years). Meanwhile, the yield on bonds issued by companies with credit ratings that are close to the company's condition is 6% pa (tenor of 5 years).
If this company offers a bond coupon of 8% pa, how much money will the company get? How do bond investors perceive the company?