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Category > Accounting Posted 31 Jul 2017 My Price 6.00

A $1,000 face value corporate bond with a 6.5 percent coupon

A $1,000 face value corporate bond with a 6.5 percent coupon (paid semiannually) has 15 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.2 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 8.5 percent. What will be the change in the bond’s price in dollars and percentage terms?

 

Answers

Alpha Geek
(8)
Status NEW Posted 31 Jul 2017 10:07 AM My Price 6.00

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Attachments

file 1501498378-1867599_1_636370382499410514_1867599.xlsx preview (91 words )
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