A corporate bond with a 7500 percent coupon has thirteen


A corporate bond with a 7.500 percent coupon has thirteen years left to maturity. It has had a credit rating of BB and a yield to maturity of 9.7 percent. The firm has recently become more financially stable and the rating agency is upgrading the bonds to BBB. The new appropriate discount rate will be 8.6 percent.

What will be the change in the bond’s price in dollars? (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

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Financial Management: A corporate bond with a 7500 percent coupon has thirteen
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