Question
The yield to maturity for 15-year bonds is as follows for four different bond rating categories. AAA 9.80% A 11.00% AA 10.00 BBB 11.60 The
The yield to maturity for 15-year bonds is as follows for four different bond rating categories.
| AAA | 9.80% | A | 11.00% |
| AA | 10.00 | BBB | 11.60 |
The bonds of Falter Corporation were rated as AAA and issued at par a few weeks ago. The bonds have just been downgraded to AA. 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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Fundamentals Of Corporate Finance
Authors: Richard A. Brealey, Marcus, Alan J, Myers, Stewart C.
2nd Edition
0070074860, 9780070074866
