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Posted on Sep 02, 2024

A corporate bond with a 7.7 percent coupon has 16 years left to maturity. It has had a credit rating of BBB and a yield

A corporate bond with a 7.7 percent coupon has 16 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 8.4 percent. 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 9.7 percent.

What will be the change in the bond

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