Problema corporate bond with a 7700 percent coupon has, Ask an Expert

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Problem:

A corporate bond with a 7.700 percent coupon has eleven years left to maturity. It has had a credit rating of BB and a yield to maturity of 10.1 percent. The firm has recently become more financially stable and the rating agency is upgrading the bonds to BBB. The new appropriate discount rate will be 9.0 percent.

Required:

Question 1: What would be the total return of the bond in dollars?

Question 2: What would be the total return of the bond in percentage?

Note: Please show how you came up with the solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162176

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