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Pybus, Inc. is considering issuing bonds that will mature in 19 years with an annual coupon...

Pybus, Inc. is considering issuing bonds that will mature in 19 years with an annual coupon rate of 11%. Their par value will be $1000, and the interest will be paid semi annually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 7.5%. 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 8.5%. What will be the price of these bonds if they receive either an A and a AA rating?

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jeff jeffy answered 6 months ago
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