Assume you pay $1,343 for a Tesla bond (14 year maturity, 6.5% coupon bond, paid semi-annually, with a YTM of 3.4%, $1,000 principal). If Tesla is downgraded and the default risk premium of Tesla increases by 6.0%, all-else-equal, what is the new bond price of Telsa?

Answer rating: 100% (QA)

To calculate the new bond price of Tesla after the increase in the default risk premium you can foll... View the full answer