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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 filling for bankruptcy is higher now that it was before the company's 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 down Go down B Stay the same Go down Go down Stay the same D Go down Go up E Stay the same Go down Go Up Go up 36 Go up Go Up Go up Multiple Choice
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