Calculate the new price, A bond's credit rating provides a

Calculate the new price

Reference no: EM13284396

A bond's credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields to maturity (YTM) of 4.3%. A-rated bonds sell at yields (YTM) of 3.6%. Assume a 10-year bond with a coupon rate of 5% is downgraded by Moodys from Aa to A rating.

a) Calculate the new price.

b) What's the new current yield?

Reference no: EM13284396

Questions Cloud

Describe the three motives or reasons for holding cash : 1. What are the sources of cash inflows to a firm over any time frame?2. What are the sources of cash outflows from a firm over any time frame?3. Describe the three motives or reasons for holding cash.

Write a complete report on microchip pic16f88 reigters : write a complete report on microchip PIC16F88 reigters, memory andits assembley language instruction with expalantion and examples.

What is the enterprise value for the company : Using the key value driver formula, what is the enterprise value in each scenario? If each scenario is equally likely, what is the enterprise value for the company?

State soft drink contains an unknown amount of citric acid : A soft drink contains an unknown amount of citric acid, C3H5O(COOH)3. 10.0ml of the soft drink requires 6.42 ml of 9.580 x 10^-2 M NaOH to reach the equivalance point in the following reaction.

Calculate the new price : A bond's credit rating provides a guide to its risk. Long-term bonds rated Aa currently offer yields to maturity (YTM) of 4.3%. A-rated bonds sell at yields (YTM) of 3.6%. Assume a 10-year bond with a coupon rate of 5% is downgraded by Moodys from..

How much will they have to save each year : How much will they have to save each year for the next 50 years, in real dollars, to reach your retirement income goal? '

Evaluate the boiling point of a solution formed : Calculate the boiling point of a solution formed by dissolving 1.45 grams of napthalene, C10H8, in 7.85 grams of cyclohexane, C6H12.

Deduce equation of total transference for a feedback system : Deduce the equation of the total transference for a feedback system with an operator of gain a, and a feedback network of transfer β.

Explain crystallizes in a face-centered cubic structure : Silver metal crystallizes in a face-centered cubic structure. The radius of the silver atom is 144.5 pm. Calculate the density of the metal in g/cm3.

User Account

All Pages