Suppose that General Motors Acceptance Corporation issued a bond with $10$ years until maturity, a face value of $$1,000,$ and a coupon rate of $7\mathrm{.}0\%($annual payments$).$ The yield toSuppose that General Motors Acceptance Corporation issued a bond with $10$ years until maturity, a face value of $$1,000,$ and a coupon rate of $7\mathrm{.}0\%($annual payments$).$ The yield toAndrew Industries is contemplating issuing a $30-$year bond with a coupon rate of $7\mathrm{.}00\%($annual coupon payments$)$ and a face value of $$1,000.$ Andrew believes it can get a rating of

A from Standard & Poor's. However, due to recent financial difficulties at the company, Standard & Poor's is warning that it may downgrade Andrew Industries' bonds to BBB$.$ Yields

on A$-$rated, long$-$term bonds are currently $6\mathrm{.}50\%,$ and yields on BBB$-$rated bonds are $6\mathrm{.}90\%.$

a$.$ What is the price of the bond if Andrew Industries maintains the A rating for the bond issue?

b$.$ What will be the price of the bond if it is downgraded?

maturity on this bond when it was issued was $6\mathrm{.}0\%.$ Assuming the yield to maturity remains constant, what is the price of the bond immediately after it makes its first

coupon payment?

After the first coupon payment, the price of the bond will be $

$($Round to the nearest cent.$)$

maturity on this bond when it was issued was $6\mathrm{.}0\%.$ Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first

coupon payment?

Before the first coupon payment, the price of the bond is $

$($Round to the nearest cent.$)$