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Memphic Memphic
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7 years ago
Nielson Motors plans to issue 10-year bonds that it believes will have an BBB rating.  Suppose AAA bonds with the same maturity have a 3.5% yield.  Assume that the market risk premium is 5% and the expected loss rate in the event of default on the bonds is 60%.  The yield that these bonds will have to pay during a recession is closest to:
A) 3.50%
B) 3.75%
C) 4.00%
D) 5.50%
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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pbrown223pbrown223
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7 years ago
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Memphic Author
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7 years ago
this is exactly what I needed
7.prime7105
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
big_larry_samp
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2 hours ago
Brilliant ツ
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