Question: Problem 3 A $ 1 , 0 0 0 face value corporate bond with a 6 . 5 % coupon ( paid semiannually ) has

Problem 3
A $1,000 face value corporate bond with a 6.5% coupon (paid semiannually) has 15 years left to maturity. It has had a credit rating of BBB and a YTM of 7.2%. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB. The new appropriate discount rate will be 8.5%. What will be the change in the bond's price in dollars and percentage terms?
Problem 3 A $1,000 face value corporate bond with a 6.5%

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