Question: Show Work* A $1000 face value corporate bond with a 8% coupon (paid semi-annually) has 6 years to maturity. 1 has a credit rating of

Show Work*

Show Work* A $1000 face value corporate bond with a 8% coupon

A $1000 face value corporate bond with a 8% coupon (paid semi-annually) has 6 years to maturity. 1 has a credit rating of AA with a yield to maturity of 4%. The firm is likely to lose its rating and drop to an "A". The appropriate yield corresponding to an 'A' rating would be 6%. What will be the change in the bond price in dollars and percentage terms

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