Question: A $ 1,000 face value corporate bond with a 6.5 percent coupon (paid semiannually) has 15 years left to maturity. It has had a credit

A $ 1,000 corporate bond with a 6.5 percent (paid semiannually) has 15 years left to It has had a credit rating of BBB and a yield to of 7.2 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate will be 8.5 percent. What will be the change in the bond’s price in dollars and percentage terms?

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