The bonds of Falter Corporation were rated as Aaa and issued at par a few weeks ago. The bonds have just been downgraded to Aa2 Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. Note: Do not round intermediate calculations and round your answer to 2 decimal places. Price of the bonds

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The yield to maturity for 15-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an
approximate answer but calculate your final answer using the formula and financial calculator methods.
Aaa
Aal
Aa2
Aa3
9.80%
10.00%
11.00%
11.80%
The bonds of Falter Corporation were rated as Aaa and issued at par a few weeks ago. The bonds have just been downgraded to Aa2
Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments.
Note: Do not round intermediate calculations and round your answer to 2 decimal places.
Price of the bonds
Transcribed Image Text:The yield to maturity for 15-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Aaa Aal Aa2 Aa3 9.80% 10.00% 11.00% 11.80% The bonds of Falter Corporation were rated as Aaa and issued at par a few weeks ago. The bonds have just been downgraded to Aa2 Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. Note: Do not round intermediate calculations and round your answer to 2 decimal places. Price of the bonds
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