Question

The yield to maturity for 10-year bonds is as follows for four different bond rating categories:


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 10-year maturity and semiannual interest payments. (Refer to “Semiannual Interest and Bond Prices” in Chapter 10 for a review ifnecessary.)


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  • CreatedOctober 14, 2014
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