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Pybus, Inc. is considering issuing bonds that will mature in 15 years with an annual coupon...

Pybus, Inc. is considering issuing bonds that will mature in 15 years with an annual coupon rate of 9 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 10.5percent. What will be the price of these bonds if they receive either an A or a AA​ rating?

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jeff jeffy answered 1 year ago
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