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6. Benson Industries plans to issue 10 -year bonds that it believes will have a BBB rating. Suppose AAA bonds with the same maturity have

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6. Benson Industries plans to issue 10 -year bonds that it believes will have a 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 bond is 60%. a. Find the expected return of AAA bond. b. Use AAA bond yield to find the risk-free rate. c. Find the expected return of Benson's BBB bond. d. Find the yield Benson's BBB bond will pay during average economic times

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