Hot Box Insulators, a public company, initially issued investment-grade, 20-year maturity, 8 percent annual coupon rate bonds 10 years ago at $1,000 par. A group of investors bought all of Hot Box’s common stock through a leveraged buyout, which turned the bonds overnight into junk bonds. Similar junk bonds are currently yielding 25 percent in the market. Calculate the current price of the original bonds.

Answer rating: 100% (QA)

Answer 35705 Here bonds are purchased for 20years but 10 years are remaining fo... View the full answer