The price of the Pybus bonds if they receive a AA rating will be ​$nothing. ​ (Round to the nearest​ cent.)

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter14: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 7DTM
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​(Related to Checkpoint​ 9.3)  ​(Bond valuation)  ​Pybus, Inc. is considering issuing bonds that will mature in
23
years with an annual coupon rate of
11
percent. Their par value will be
​$1,000​,
and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds​ and, if it​ does, the yield to maturity on similar AA bonds is
10.5
percent. ​ However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A​ rating, the yield to maturity on similar A bonds is
11.5
percent. What will be the price of these bonds if they receive either an A or a AA​ rating?
a. The price of the Pybus bonds if they receive a AA rating will be
​$nothing.
​ (Round to the nearest​ cent.)
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