Problem 6-15 (LG 6-2) A $2,000 face value corporate bond with a 5.9 percent coupon (paid semiannually) has 13 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 6.4 percent. 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 7.5 percent. What will be the change in the bond's price in dollars and percentage terms? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Change in the bond's price in dollars Change in the bond's price in percentage %
Problem 6-15 (LG 6-2) A $2,000 face value corporate bond with a 5.9 percent coupon (paid semiannually) has 13 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 6.4 percent. 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 7.5 percent. What will be the change in the bond's price in dollars and percentage terms? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Change in the bond's price in dollars Change in the bond's price in percentage %
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 6-15 (LG 6-2)
A $2,000 face value corporate bond with a 5.9 percent coupon (paid semiannually) has 13 years left to maturity. It has had a credit
rating of BBB and a yield to maturity of 6.4 percent. 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 7.5 percent. What will be the change in the bond's price in
dollars and percentage terms? (Negative values should be indicated by a minus sign. Do not round intermediate calculations.
Round your percentage answers to 3 decimal places. (e.g., 32.161))
Change in the bond's price in dollars
Change in the bond's price in percentage
%
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