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5. A $1,000 face value corporate bond with a 6.5% coupon (paid semiannually) has 15 year left to maturity. It has had a credit rating
5. A $1,000 face value corporate bond with a 6.5% coupon (paid semiannually) has 15 year left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.2%. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 8.5%. What will be the change in the bond's price in dollars and percentage terms Step by Step Solution
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Optimization Methods In Finance
Authors: Gerard Cornuejols, Reha Tütüncü
1st Edition
0521861705, 978-0521861700
