Question
A company has bonds paying $100 per year and a face value of $1000 due in ten years. They were issued at $1000 so the
A company has bonds paying $100 per year and a face value of $1000 due in ten years. They were issued at $1000 so the market determined the required return was 10%. If the industry becomes more risky and the market now requires a 12% rate or return, what happens to the price of the bond? Assume this happens immediately after the bond is released.
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077328894, 71313974, 9780077395810, 77328892, 9780071313971, 77395816, 978-0077400163
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