What would limbaughs bonds be selling for currently what is


Liddy Products, Inc. just issued 10-year, 8% coupon bonds at par. Outstanding bonds of Limbaugh Corp., Liddy's closest competitor, have a maturity of 10 years and are viewed by investors as being of about the same risk as the Liddy bonds, but carry a 5% coupon. What would Limbaugh’s bonds be selling for currently? What is the current yield of the Limbaugh bond issue? Assume semi-annual coupons. Without any calculations, if the yield to maturity for these bonds were to increase by 50 basis points, which of the two company’s bond prices would change more?

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Financial Management: What would limbaughs bonds be selling for currently what is
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