Determine the new price of the bonds

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The yield to maturity for 15-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Aaa9.80%

Aa110.00%

Aa211.00%

Aa311.60%

The bonds of Falter Corporation were rated as Aaa and issued at par a few weeks ago. The bonds have just been downgraded to Aa1. Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments.

Reference no: EM132403187

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