(Answered) Bond valuation pybus inc is considering issuing bonds that

Finance

(Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 15 years with an annual coupon rate of 8 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 11.5 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 12.5 percent. What will be the price of these bonds if they receive either an A or a AA rating?

The price of the Pybus bonds if they receive an A rating will be? (round in nearest cent)

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92501781
Price:- $10

Verified Expert

Priced at $20 Now at $10, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Assume that real risk-free rate r 100 the maturity risk

Assume that real risk-free rate (r*) = 1.00%; the maturity risk premium is found as MRP = 0.20%×(t - 1), where t = years to maturity; the default risk premium for AT&T bonds is found as DRP = 0.07%×(t - 1); the liquidity ...

Question one 11 what is meant by each of each of the

Question one: 1.1. What is meant by each of each of the following statements? a. "The present value of the future cash flows expected from an investment project is R30,000,000". b. "The net present value (NPV) of an inve ...

Question - city motors will sell a 15000 car for 345 a

Question - City Motors will sell a $15,000 car for $345 a month for 52 months. What is the interest rate? (What is the process doing in financial calculator?)

Question - you purchase a machine for 100000 such machine

Question - You purchase a machine for $100,000. Such machine has a 3-year MACRS classification. If the machine is sold at the end of the second year for $45,000, what are the after-tax proceeds from the sale, assuming yo ...

Set up an amortization schedule for a 15000 loan to be

Set up an amortization schedule for a $15,000 loan to be repaid in equal installments at the end of each of the next 4 years. The interest rate is 10%. How large must each payment be if the loan is for $30,000? Assume th ...

Question - write answers to the following statements each

Question - Write answers to the following statements. Each answer should be approximately 225 words and should use 1-2 sources in addition to the textbook. Use real-life examples to support your reasoning. Demonstrate ho ...

Suppose that the following statistics pertaining to the

Suppose that the following statistics pertaining to the returns on the market and ABC stock: Standard deviation on returns on ABC stock is 25.00 %, the standard deviation on returns on the market is 20.00%, and their cor ...

Question are the euro yen and canadian dollar trading at a

Question: Are the euro, yen and canadian dollar trading at a premium or discount to the U.S. dollar. What are indicative interest rates in each of those countries. Use T-Bills from their treasury rates. The response must ...

If the rate of inflation is 43 what nominal interest rate

If the rate of inflation is 4.3%?, what nominal interest rate is necessary for you to earn a 2.8 %real interest rate on your? investment? ?(Note: Be careful not to round any intermediate steps less than six decimal? plac ...

How to make sure that no patients information will be

How to make sure that no patient's information will be accessed without authorization during implementation of Electronic Health Records in a hospital. What are the steps to follow?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert