Bond valuation-what will be the price of these bonds

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Reference no: EM131575637

(Bond valuation) ?Pybus, Inc. is considering issuing bonds that will mature in 15 years with an annual coupon rate of 8%. 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 8.5%. 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 9.5%. What will be the price of these bonds if they receive either an A or a AA? rating?

a. The price of the Pybus bonds if they receive a AA rating will be $( ) (Round to the nearest? cent.)

b. The price of the Pybus bonds if they receive a A rating will be $( ) (Round to the nearest? cent.)

Reference no: EM131575637

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