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Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 23, Problem 13PS
Summary Introduction
To determine: The amount of cost that need to insure the bonds of company B against default.
Credit spread is the difference between the yields of two bonds of different credit quality but having same maturity.
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Students have asked these similar questions
If interest rates rise after a bond issue, what will happen to the bond’s price and YTM? Doesthe time to maturity affect the extent to which interest rate changes affect the bond’s price?(Again, an example might help you answer this question.)
Does the interest rate on a T-bond include a default risk premium? Explain.
If interest rates rise after a bond issue, what would happen to the bond's price and YTM? Does the time to maturity affect the extend to which interest rates changes affect the bond price? (Please give an example)
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Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
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What happens to my bond when interest rates rise?; Author: The Financial Pipeline;https://www.youtube.com/watch?v=6uaXlI4CLOs;License: Standard Youtube License