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Eight Track Tape Entertainment, Inc., just announced that they might not be able to make their upcoming bond coupon payment, and several Wall Street analysts

Eight Track Tape Entertainment, Inc., just announced that they might not be able to make their upcoming bond coupon payment, and several Wall Street analysts have just issued a report saying the danger of the company filing for bankruptcy is higher now that it was before the companys announcement. As a result, S&P cut their rating on these bonds from B+ to C. All else equal, which of the following is most likely to happen?

Answer Bond Price will: Coupon Rate will: YTM will:
A Go up Go down Go down
B Go up Stay the same Go down
C Go down Stay the same Go up
D Go down Go up Go up
E Stay the same Go down Go up

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