Rating agencies$$such as Standard & Poor$$s Corporation$($S&P$),$ Moody$$s Investor Service, and Fitch Ratings$$assign credit ratings to bonds based on both quantitative and qualitative factors. These ratings are considered indicators of the issuer$$s default risk, which impacts the bond$$s interest rate and the issuer$$s cost of debt capital.

Based on these ratings, bonds are classified into investment$-$grade bonds and junk bonds. Which of the following bonds is likely to be classified as an investment$-$grade bond?

A bond whose issuer has a $30\%$ return on capital, a total debt to total capital ratio of $15\%,$ and a $6\%$ yield.

A bond whose issuer has a $10\%$ return on capital, a total debt to total capital ratio of $85\%,$ and a $13\%$ yield.

You heard that rating agencies have downgraded a bond$$s rating. The yield on the bond is likely to $,$ and the bond$$s price will $.$