7. The yield to maturity for 25-year bonds is as follows for four different bond rating categories:

The bonds of Evans Corporation were rated as Aal and issued at par a few weeks ago. The bonds have just been downgraded to Aa2. Determine the new price of the bonds, assuming a 25-year maturity and semiannual interest payments. As a first step, use the data above as a guide to appropriate interest rates for bonds with different ratings.

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9.4% Aa2 10.0% Aal 9.6% Aa3 10.2%