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Andrew Industries is contemplating issuing a 3 0 - year bond with a coupon rate of 5 . 5 2 % ( annual coupon payments

Andrew Industries is contemplating issuing a30-year bond with a coupon rate of 5.52%(annual coupon payments) and a face value of $ 1,000. Andrew believes it can get a rating of A from Standard and Poor's. However, due to recent financial difficulties at the company, Standard and Poor's is warning that it may downgrade Andrew Industries bonds to BBB. Yields on A-rated, long-term bonds are currently 5.02%, and yields on BBB-rated bonds are 5.42% a. What is the price of the bond if Andrew maintains the A rating for the bond issue? b. What will the price of the bond be if it is downgraded? The price of the bond maintaining the A rating is $ (Round to the nearest cent.)

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