Question
The yield to maturity for 15-year bonds is as follows for four different bond rating categories. AAA 8.60% A 9.00% AA 8.80 BBB 10.00 The
The yield to maturity for 15-year bonds is as follows for four different bond rating categories.
| AAA | 8.60% | A | 9.00% |
| AA | 8.80 | BBB | 10.00 |
The bonds of Falter Corporation were rated as A and issued at par a few weeks ago. The bonds have just been downgraded to BBB. Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. Assume the par value of the bonds is $1,000. (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.)
Price of the bonds $
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Personal Finance
Authors: Vickie L Bajtelsmit
2nd Edition
111959247X, 9781119592471
