Problem 24-3 Bond ratings It is 2030 and the yields on corporate bonds are as follows: Aaa 8% A 10% Ba 12% Tau Corporation wishes to raise $10 million by an issue of 9% 10-year bonds. Assume a face value of $100. What will be the likely i price (as a percent of face value) if Tau is rated (a) Aaa, (b) A, or (c) Ba? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Aaa bond price b. A bond price c. Ba bond price % of face value. % of face value. % of face value.
Problem 24-3 Bond ratings It is 2030 and the yields on corporate bonds are as follows: Aaa 8% A 10% Ba 12% Tau Corporation wishes to raise $10 million by an issue of 9% 10-year bonds. Assume a face value of $100. What will be the likely i price (as a percent of face value) if Tau is rated (a) Aaa, (b) A, or (c) Ba? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Aaa bond price b. A bond price c. Ba bond price % of face value. % of face value. % of face value.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Problem 24-3 Bond ratings
It is 2030 and the yields on corporate bonds are as follows:
Aaa
8%
A
10%
Ba
12%
Tau Corporation wishes to raise $10 million by an issue of 9% 10-year bonds. Assume a face value of $100. What will be the likely issue
price (as a percent of face value) if Tau is rated (a) Aaa, (b) A, or (c) Ba?
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
a. Aaa bond price
b. A bond price
c. Ba bond price
%
of face value.
%
of face value.
% of face value.
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