Question
1. A corporate bond with a 7.100 percent coupon has eleven years left to maturity. It has had a credit rating of BB and a
1. A corporate bond with a 7.100 percent coupon has eleven years left to maturity. It has had a credit rating of BB and a yield to maturity of 8.9 percent. The firm has recently become more financially stable and the rating agency is upgrading the bonds to BBB. The new appropriate discount rate will be 7.8 percent.
| What will be the change in the bond |
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Handbook Of Financial Intermediation And Banking
Authors: Anjan V. Thakor, Arnoud Boot
1st Edition
0444515585, 978-0444515582
