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2) Grummon Corporation has issued zero-coupon corporate bonds with a five-year maturity. Investors believe there is a 25% chance that Grummon will default on these
2) Grummon Corporation has issued zero-coupon corporate bonds with a five-year maturity. Investors believe there is a 25% chance that Grummon will default on these bonds. If Grummon does default, investors expect to receive only 65 cents per dollar they are owed. If investors require a 6% expected return on their investment in these bonds, what will be the price and yield to maturity on these bonds? 4) You are a real estate agent thinking of placing a sign advertising your services at a local bus stop. The sign will cost $7000 and will be posted for one year. You expect that it will generate additional revenue of $1120 per month. What is the payback period
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