Indicate whether each of the following actions will increase or decrease a bonds yield to maturity: a.
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Indicate whether each of the following actions will increase or decrease a bond’s yield to maturity:
a. The bond’s price increases.
b. The bond is downgraded by the rating agencies.
c. A change in the bankruptcy code makes it more difficult for bondholders to receive payments in the event the firm declares bankruptcy.
d. The economy seems to be shifting from a boom to a recession. Discuss the effects of the firm’s credit strength in your answer.
e. Investors learn that the bonds are subordinated to another debt issue.
AppendixLO1
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Fundamentals Of Financial Management Concise Edition
ISBN: 9781285065137
8th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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