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( Related to Checkpoint 9 . 3 ) ( Bond valuation ) Pybus, Inc. is considering issuing bonds that will mature in 2 5 years
Related to Checkpoint Bond valuation Pybus, Inc. is considering issuing bonds that will mature in years with an annual coupon rate of percent. Their par value will be $ 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 percent. 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 percent. What will be the price of these bonds if they receive either an A or a AA rating?
a The price of the Pybus bonds if they receive a AA rating will be $ Round to the nearest cent.
b The price of the Pybus bonds if they receive an A rating will be $
Round to the nearest cent.
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