Pybus, Inc. is considering issuing bonds that will mature in 20 years with an annual coupon rate of 7 percent. Their par value will be $1000, 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 8 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 9 percent. What will be the price of these bonds if they receive either an A or a AA rating?
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
NEED HELP WITH FINANCIAL CALCULATOR, LET ME KNOW
AS NOTHING WAS MENTIONED, SOLVED WITH EXCEL.
Get Answers For Free
Most questions answered within 1 hours.