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A corporate bond that is rated AAA (lowest risk of default) has 20 years to maturity and pays a 4.5% coupon (payments are semi-annual). What
- A corporate bond that is rated AAA (lowest risk of default) has 20 years to maturity and pays a 4.5% coupon (payments are semi-annual). What is the price of the bond if the required return on AAA bonds is 5.7%?
- What will happen to the price of the bond in #2 if the credit rating is downgraded to AA? Just describe the direction, dont try to calculate anything.
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Practical Financial Management
Authors: William R. Lasher
7th edition
128560721X, 9781133593669, 1133593682, 9781285607214, 978-1133593683
