Pybus, Inc is considering issuing bonds that will mature in 18 years with an annual coupon...

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Finance

Pybus, Inc is considering issuing bonds that will mature in 18years with an annual coupon rate of 6%. Their par value will be$1,000 and the interest will be paid semiannually. Pybus is hopingto get AA rating on its bonds and, if it does, the yield tomaturity on similar AA bonds is 8.5%. However, Pybus is not surewhether the new bonds will receive a AA rating. If they receive anA rating, the yield to maturity on similar A bonds is 9.5%. Whatwill be the price of these bonds if they receive either an A or aAA rating?

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Price of the Pybus Inc bond if it received a AA rating Information provided Par value future value 1000 Time 18 years2 36 semiannual periods Coupon rate 62 3 Coupon payment 0031000 30 Yield to maturity 852 425 The See Answer

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Pybus, Inc is considering issuing bonds that will mature in 18years with an annual coupon rate of 6%. Their par value will be$1,000 and the interest will be paid semiannually. Pybus is hopingto get AA rating on its bonds and, if it does, the yield tomaturity on similar AA bonds is 8.5%. However, Pybus is not surewhether the new bonds will receive a AA rating. If they receive anA rating, the yield to maturity on similar A bonds is 9.5%. Whatwill be the price of these bonds if they receive either an A or aAA rating?