3) Consider the following information regarding corporate bonds: AAA 0.0% 0.0% 0.05 CC 12.2% 16.0% 48.0% 0.31 Rating Average Default Rate Recession Default Rate Average Beta AA 0.1% 1.0% 0.05 BBB BB 0.45% 2.2% 3.0% 5.5% 0.2% 3.0% 0.05 8.0% 0.17 0.26 0.10 TimoCorp has 100 million shares outstanding with a market price of $4.5 per share and has issued a BBB-rated bond with a market value of $450 million and the yield to maturity of 5%. a) The average loss rate in the event of default is 30%, what is the expected return for Timo's bond under normal circumstances? b) During recession, the average loss rate in the event of default increases to 80%, what is the expected return for Timo's bond during recession? c) Compute the asset beta for TimoCorp