Considering issuing bonds-what will be the price of bonds

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Reference no: EM131924227

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 ?$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 9.5 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 10.5 percent. What will be the price of these bonds if they receive either an A or a AA? rating?

Reference no: EM131924227

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