A 1800 face value corporate bond with a 57 percent coupon, Ask an Expert

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A $1,800 face value corporate bond with a 5.7 percent coupon (paid semiannually) has 14 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 6.2 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 7.3 percent. What will be the change in the bond’s price in dollars and percentage terms?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92421180

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