integrated mini-case Corporate Bond Credit Ris Changes and Bond Prices o Toys is a profitable, medium-sized, retail company. Several issued a 6/2 percent coupon bond, which pays interest semiannually mature in 10 years and is currently priced in the market as S1,037.19h yields to maturiy for 10-ycar corporate bonds are reported in the following tinle The bond will Land'o'Toys is a ge following tabley bond rating. Yield (%) Bond Rating Yield (%) Bond Rating 13 5.4 8.2 5.7 92 6.0 10.5 6.5 12.0 14.5 Periodically, one company will purchase another by buying all of the target firms stock. The bonds of the target firm continue to exist. The debt obligation is assumed by the new firm. The credit risk of the bonds often changes because of this type of an event. Suppose that the firm Treasure Toys makes an announce Land'o Toys. Due to Treasure Toys' projected financial structure after the purchase. Standard & Poor's states that the bond rating for Land'o'Toys bonds will change ment that it is purchasing to BB. a. Compute the yield to maturity of Land'o'Toys bonds before the purchase announcement and use it to determine the likely bond rating. b. Assume the bond's price changes to reflect the new credit rating. price? Did the price increase or decrease? c. What is the dollar change and percentage change in the bond price? d. How do the bond investors feel about the announcement? What is the nesw