Question: Mango Inc. is going to issue a 2 5 - year bond with a coupon rate of 3 . 0 0 % ( with 3
Mango Inc. is going to issue a year bond with a coupon rate of with
coupon payments per year and a face value of $ Mango Inc. believes it can be
rated A by Standard and Poor's. However, because of recent financial difficulties at
the company, Standard and Poor's is warning that it may downgrade Mango Inc.
Industries bonds to BBB Yields on Arated, longterm bonds are currently
quoted as an annual percentage rate APR and yields on BBBrated bonds are
quoted as APR What is the change in the price of the bond if it is
downgraded?
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