A company has bonds paying $100 per year and a face value of $1000 due in ten years. They were issued at $1000 so the market determined the required return was 10%. If the industry becomes more risky and the market now requires a 12% rate or return, what happens to the price of the bond? Assume this happens immediately after the bond is released.

Answer rating: 100% (QA)

Company has 10 coupon bonds on the market with 10 years to maturity The ... View the full answer