Reduce coupon payments on the bond

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XYZ Corporation is in severe ?nancial distress and has 10-year bonds outstanding selling for $900. The bonds pay a coupon of 14% annually, but the firm is currently renegotiating the debt. It appears that the lenders will allow the ?rm to reduce coupon payments on the bond to one-half the originally contracted amount. The ?rm can handle these lower payments. At the new level of payments what will be the yield to maturity?

Reference no: EM133047291

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