Question
A firm receives a bond rating of BBB on its newly issued bonds. After one year the firms earnings were below expectations and the rating
A firm receives a bond rating of BBB on its newly issued bonds. After one year the firms earnings were below expectations and the rating agencies lowered the bond rating to B. Would the yield-to-maturity on the bond rise or fall? What would happen to the price of the bond? Why?
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Financial Modeling
Authors: Simon Benninga
2nd Edition
0262024829, 9780262024822
