Question
2 years go by. MCOs Treasurer was last seen with 2 suitcases of cash and a plane ticket for the Cayman Islands. The company is
2 years go by.
MCOs Treasurer was last seen with 2 suitcases of cash and a plane ticket for the Cayman Islands. The company is in serious financial trouble. Moodys drops the rating from AA to B (Junk). The insurance company sells the bond to a hedge fund with 5 years left to maturity for a YTM of 14%.
Summary: the bond has 5 years to maturity, a coupon of $50, a par value of $1000 and is trading with at YTM of 14%.
- A) What price did the insurance company receive for the bond?
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Personal Finance Essentials Credit And Borrowing
Authors: Julia A Heath
1st Edition
1604139889, 9781604139884
