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Homework answers / question archive / ybus, Inc
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?
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