Result of the perceived increase in company risk

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Reference no: EM131619359

ABC Corp. has one fixed-rate bond issue outstanding owned by many investors. Industry analysts believe that ABC Corp. has recently become a riskier company due to increased industry competition. Consequently, investors who own bonds issued by ABC Corp. believe that the company’s bonds are now riskier.

As a result of the perceived increase in company risk, the bond’s:

A price will likely increase.

B coupon rate will likely decrease.

C current yield will likely increase.

D yield to maturity will likely decrease

Reference no: EM131619359

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