BUS 225 DAYONE LL
BUS 225 DAYONE LL
17th Edition
ISBN: 9781264116430
Author: BLOCK
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 16, Problem 8P

Assume the par value of the bonds in the following problems is $1,000 unless otherwise specified.

The yield to maturity for 10-year bonds is as follows for four different bond rating categories:

Chapter 16, Problem 8P, Assume the par value of the bonds in the following problems is $1,000 unless otherwise specified.

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 10-year maturity and semiannual interest payments. (Refer to “Semiannual Interest and Bond Prices� in Chapter 10 for a review if necessary.)

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