Question
A corporate bond with a coupon rate of 8.4 percent has 16 years left to maturity. It has had a credit rating of BBB and
A corporate bond with a coupon rate of 8.4 percent has 16 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 9.1 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 10.4 percent. (Assume interest payments are semiannual.) What will be the change in the bonds price in dollars?
What will be the change in the percentage?
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Corporate Treasury And Cash Management
Authors: Robert Cooper
1st Edition
1349512699, 9781349512690
