You have a bond that pays $125 per year in coupon payments. Which of the following would result in an increase in the price of your bond?
A) Coupon payments on newly-issued bonds rise to $140 per year.
B) The likelihood that the firm issuing your bond will default on debt increases.
C) The price of a share of stock in the company falls.
D) Coupon payments on newly-issued bonds fall to $75 per year.
Answer: D
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