Answer:
The coupon rate attached to these bonds will need to be increased than other corporate bond issues in order to attract investors.
Explanation:
Bonds are assessed to be less attractive than the other bonds are mainly because its returns does not yield as high as other bonds with the similar risk level. In other words, the higher the risk of the bond, the higher the return the bond should offered to be as attractive as their peers.
For Bathtub Brewing Company's bond, there may be some reasons such as lower coupon rate, higher risk attached to the bond or the company itself which make the bond less attractive.
Thus, coupon rate needs to be raised up so that the firm's bond may generate a higher return and as a result be as attractive as other bonds offered by other businesses.
