The yield to maturity for 25-year bonds is as follows for four different bond rating categories.             AAA 9.20%     A 10.00%     AA 9.40      BBB 10.40        The bonds of Falter Corporation were rated as AAA and issued at par a few weeks ago. The bonds have just been downgraded to AA. Determine the new price of the bonds, assuming a 25-year maturity and semiannual interest payments. Assume the par value of the bonds is $1,000. (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.)   Price of the bonds

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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The yield to maturity for 25-year bonds is as follows for four different bond rating categories.

 

       
  AAA 9.20%     A 10.00%  
  AA 9.40      BBB 10.40   
 

 

The bonds of Falter Corporation were rated as AAA and issued at par a few weeks ago. The bonds have just been downgraded to AA. Determine the new price of the bonds, assuming a 25-year maturity and semiannual interest payments. Assume the par value of the bonds is $1,000. (Use a Financial calculator to arrive at the answers. Round the final answer to 2 decimal places.)

 

Price of the bonds   

 

please show step by step how to use calculator BA II 

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