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Details A 5 - year bond of a firm in severe financial distress has a coupon rate of 1 4 % and sells for $
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A year bond of a firm in severe financial distress has a coupon rate of and sells for $ The firm is currently renegotiating the debt, and it appears
that the lenders will allow the firm to reduce copon payments on the bond to onehalf the originally contracted amount. The firm can handle these lower
payments. What are a the stated with original coupon rate and b the expectedwith reduced coupon rate yield to maturity of the bonds? The bond
makes its coupon payments annually.
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