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Hay Corporation has bonds that matured in ten years trading on the market. Moody just announced that they have decided to downgrade the credit rating

Hay Corporation has bonds that matured in ten years trading on the market. Moody just announced that they have decided to downgrade the credit rating of the company's bonds from Baa to Ba.


What do you think will happen to the company's bond price immediately after the announcement (assuming that this is the only information)? Explain your answer.

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