Question

Bond valuation) ​Pybus, Inc. is considering issuing bonds that will mature in years with an annual coupon rate of percent. Their par value will be ​$​, 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 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 percent. What will be the price of these bonds if they receive either an A or a AA​ rating?

Answer 1

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