The yield to maturity for 15-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
Aaa 8.60%
Aa1 8.80%
Aa2 9.00%
Aa3 10.00%
The bonds of Falter Corporation were rated as Aa1 and issued at par a few weeks ago. The bonds have just received a new rating of Aa3. Determine the new price of the bonds, assuming a 15-year maturity and semi annual interest payments