Please Explain ow they got to this answer. Now, three years after the bonds were issued; $($and with five years until maturity$),$ Ford continues to struggle and faces a major restructuring. The required rate of return $($Kd$)$ on the Ford bonds has changed to $8\mathrm{.}875\%$ per annum.

What is the current intrinsic value of the bond $$ show your work above? $$858\mathrm{.}54$ In which geographic market would you imagine Ford has struggled most? China, for real. $-5$

f$.)$ What is credit risk; what does it measure, quantify using data given in the question? Risk of Default on Interest and Principal, it$$s what the rating agencies do$.$ What is market risk; how does it apply in this case? Market risk is any kind of Price risk, here the price that moves is Interest rate risk, meaning Kd$-5$

g$.)$ Where is the line of demarcation $($i$.$e$.,$The Mendoza Line$)$ between Investment Grade and Non$-$investment grade bonds $$ why does it matter $$ use Ford as an example? The demarcation line is between BBB$-$ and BB$+.$ It matters because some investors, by law, will have to sell Ford$$s bonds at the then market clearing price when the rating falls below Investment grade. As seen in Margin Call, it$$s gets ugly when there is a fire sale. What is Ford$$s current rating from the three major ratings agencies $$ Fitch BBB $-,$ S&P BB $+$ and Moody$$s Ba$1?$ How do these ratings compare to General Motors Fitch BBB$,$ Chrysler BBB$,$ and Tesla No rating from Fitch, Moody$$s Baa$3$ low investment grade, S&P BB $+-$ non$-$investment grade? $-5$