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ybus, Inc

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ybus, Inc. is considering issuing bonds that will mature in

21 years with an annual coupon rate of

7 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

12 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

13 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 a AA rating will be how much?