Face value coupon rate coupon

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Reference no: EM134040325

Question

Suppose you have invested in the corporate bond of Suzlon Corporation Inc (SCI) with the following details. Face Value Coupon rate Coupon frequency Half-yearly AA Credit Rating Years to maturity 15 years Yield to Maturity $1,000 6.5% 7.2% Due to certain issues, the company has recently gotten into trouble repaying its commercial loan, and the issuer rating agency Moody's has downgraded Suzlon's bonds rating to BBB. The new appropriate discount rate will be 8.5 per cent. Due to these sudden changes in bond rating, if you plan to sell the bond immediately at a new price, what will be your profit/ loss in dollars and percentage terms?

Reference no: EM134040325

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