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ABC, Inc. is considering issuing bonds that will mature in 10 years with an 9% coupon rate. Their par value will be $1000, and the

ABC, Inc. is considering issuing bonds that will mature in 10 years with an 9% coupon rate. Their par value will be $1000, and the interest will be paid semi-annually. ABC is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 8%. However, ABC is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 10%. what will be the price of these bonds if they receive either an A or a AA rating?

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