If Zeus Energy bonds are upgraded from BBB− to BBB+, which of the following statements is true?
A) The current bond price will decrease and interest rates on new bonds issued will increase.
B) Interest rates required on new bonds issued will increase.
C) The current bond price will decrease.
D) The current bond price will increase and interest rates on new bonds issued will decrease.

Question

Quizplus · Accepted Answer

When a bond's rating is upgraded, it is seen as less risky, leading to an increase in its price and a decrease in the interest rates required on new bonds issued by the company.

If Zeus Energy Bonds Are Upgraded from BBB− to BBB