Use the table for the question(s) below.

Consider the following yields to maturity on various

oneyear

zerocoupon

securities:

Security	Yield (%)
Treasury	4.6
AAA corporate	4.8
BBB corporate	5.6
B Corporate	6.2

Wyatt Oil is contemplating issuing a

20year

bond with semiannual coupons, a coupon rate of 5%, and a face value of $1000. Wyatt Oil believes it can get a AAA rating from Standard and Poor's for this bond issue. What is the difference in the price the company will receive if the rating is BBB instead of AAA?

Answer rating: 100% (QA)

To calculate the difference in the price Wyatt Oil will receive if the bond is rated BBB instead of ... View the full answer