A bonds credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields

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A bond’s credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields to maturity of 8.5 percent. A-rated bonds sell at yields of 8.8 percent.

If a 10-year bond with a coupon rate of 8 percent is downgraded by Moody’s from Aa to A rating, what is the likely effect on the bond price?

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Fundamentals Of Corporate Finance

ISBN: 9780072416275

3rd Edition

Authors: Richard A. Brealey

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Question Posted: Jun 05, 2024 01:03 AM

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A bonds credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields

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Fundamentals Of Corporate Finance

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