ABC Pharmaceuticals Inc. issued $100 million in bonds due in 10 years. After discussions with its investment banker, ABC decided that the bonds would be issued with a coupon rate of 7 percent with interest paid annually. The 7% coupon bonds were issued at par.

Suppose one year after issuance, the company issues a press release stating it is under investigation by the SEC for fraud.

After issuing the press release the bonds coupon rate and yield to maturity would _______

Group of answer choices

Increase and decrease, respectively

Remain constant and decrease, respectively

Decrease and remain constant, respectively

Remain constant and increase, respectively