(Related to Checkpoint 9.3)(Bond valuation)Pybus, Inc. is considering issuing bonds that will mature in

18

years with an annual coupon rate of

9

percent. Their par value will be

$1,000,

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

10.5

percent. However, Pybus is unsure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bond is

11.5

percent. What will these bonds' prices be if they receive either an A or an AA rating?

Question content area bottom

Part 1

a. The price of the Pybus bonds, if they receive a AA rating, will be

$enter your response here.

(Round to the nearest cent.)