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You are valuing a new investment grade bond for a firm with a AA credit rating. The bonds have a face value of $1000, mature
You are valuing a new investment grade bond for a firm with a AA credit rating. The bonds have a face value of $1000, mature in 15 years, and have a coupon rate of 11.9%. Coupons are paid semi-annually with the first coupon due in 6 months. The current risk free rate is 4.67% and current corporate bond credit spreads are: Credit Rating Spread (%) AAA 0.51 AA 1.86 A 3.08 BBB 9.19 Part A What is the yield to maturity for the bonds as a percentage? % per annum (Report an exact answer with no rounding) Part B What is the market price of the bonds? per bond (Round your final answer to 2 decimal places) Part 6 Immediately after issue, the firm announces some news that causes the market to revalue the bond to be $851.7. What is the bond's yield to maturity (as a percentage) at this new price. per annum (Round your final answer to 4 decimal places)
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