https://assignmentspool.com/wp-content/uploads/2021/01/logo-300x60.png 0 0 Davie https://assignmentspool.com/wp-content/uploads/2021/01/logo-300x60.png Davie2019-06-28 13:20:592019-06-28 13:20:59Pybus, Inc.
Pybus, Inc. is considering issuing bonds that will mature in 24 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 11.5 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 12.5 percent. What will be the price of these bonds if they receive either an A or a AA rating?