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Pybus, Inc. is considering issuing bonds that will mature in 22 years with an annual coupon rate of 7%. Their par value will be $1000,
Pybus, Inc. is considering issuing bonds that
will mature in 22 years with an annual coupon
rate of 7%. Their par value will be $1000, and
the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 10%. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an a rating, the yield to maturity on similar a bonds is 11%. What will the price of these bonds if they receive either an A or a AA rating?
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Numerical Methods In Finance
Authors: René Carmona, Pierre Del Moral, Peng Hu, Nadia Oudjane
2012th Edition
3642257453, 978-3642257452
