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Pybud Inc. is considering issuing bondsthat will mature in 19 years with an annual coupon rate of 11 percent. Their par value will be 1000
Pybud Inc. is considering issuing bondsthat will mature in 19 years with an annual coupon rate of 11 percent. Their par value will be 1000 and the interest will be paid semiannually. Pybis is hoping to get a AA rating on its bonds and if it does, the yield to maturityon similar AA bonds is 7.5 percent. However, Pybus is notsure whether the new bonds will receive a AA rating. If they recieve an A rating, the yoeld to maturityon similar A bonds is 8.5 percent. What will be the price of these bonds if they receive either an A or AA rating?
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