The yield to maturity for 25-year bonds is as follows for four different bond rating categories:
Aaa - 9.4%
Aa1 - 9.6%
Aa2 - 10.0%
Aa3 - 10.2%
The bonds of Evans Corporation were rated as Aal and issued at par a few weeks ago. The bonds have been downgraded to Aa2. Determine the new price of the bonds, assuming a 25-year maturity and semi-annual interest payments. (As a first step, use the data above as a guide to appropriate interest rates for bonds with different ratings).© BrainMass Inc. brainmass.com June 4, 2020, 12:00 am ad1c9bdddf
The expert examines Evans Corporation price of bond rating categories.