Question: ABC Corp. has one fixed-rate bond issue outstanding owned by many investors. Industry analysts believe that ABC Corp. has recently become a riskier company due
ABC Corp. has one fixed-rate bond issue outstanding owned by many investors. Industry analysts believe that ABC Corp. has recently become a riskier company due to increased industry competition. Consequently, investors who own bonds issued by ABC Corp. believe that the companys bonds are now riskier.
As a result of the perceived increase in company risk, the bonds:
| A | price will likely increase. |
| B | coupon rate will likely decrease. |
| C | current yield will likely increase. |
| D | yield to maturity will likely decrease |
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