Question
The yield to maturity for 20-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate
The yield to maturity for 20-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
| Aaa | 9.80% |
|---|---|
| Aa1 | 10.00% |
| Aa2 | 11.00% |
| Aa3 | 11.20% |
The bonds of Falter Corporation were rated as Aaa and issued at par a few weeks ago. The bonds have just been downgraded to Aa2. Determine the new price of the bonds, assuming a 20-year maturity and semiannual interest payments.
Note: Do not round intermediate calculations and round your answer to 2 decimal places.
Price of bonds=
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The Mining Valuation Handbook Mining And Energy Valuation For Investors And Management
Authors: Victor Rudenno
4th Edition
0730377075, 978-0730377078
