ABC Corp. has one fixed-rate bond issue outstanding owned by many investors. Industry analysts believe that ABC Corp. has recently become a riskier company due to increased industry competition. Consequently, investors who own bonds issued by ABC Corp. believe that the company’s bonds are now riskier.
As a result of the perceived increase in company risk, the bond’s:
A price will likely increase.
B coupon rate will likely decrease.
C current yield will likely increase.
D yield to maturity will likely decrease