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Suppose you have invested in the corporate bond of Sutton Corp the following details Face Value Coupon rate $ 1 , 0 0 0 6
Suppose you have invested in the corporate bond of Sutton Corp the following details
Face Value
Coupon rate
$
term
Coupon frequency
Halfyearly
Credit Rating
AA
Years to maturity
years
Yield to Maturity
Due to certain issues, the company has recently gotten into trouble repaying its commercial loan, and the issuer rating agency Moody's has downgraded Suzon's bonds rating to BBB The new appropriate discount rate will be per cent.
Due to these sudden changes in bond rating, if you plan to sell the bond immediately st a new price, what will be your profit loss in dollars and percentage terms?
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