The article explores how changes in interest rates and the likelihood of a company defaulting affect the price and risk of corporate bonds. By considering both interest rate risk and default risk, the researchers found that Merton's previous conclusions about corporate bond riskiness are no longer accurate in a setting with fluctuating interest rates. They analyzed the price of corporate bonds and different ways to measure their risk, such as comparing their yield to risk-free bonds and looking at the variability of their returns. The study extends Merton's work from a fixed interest rate scenario to one with unpredictable interest rate changes, shedding light on how these factors interact to determine bond prices and risk levels.