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A 10-year maturity bond of a firm that is currently in bankruptcy has a coupon rate of 14% and is quoted at 52. The firm
A 10-year maturity bond of a firm that is currently in bankruptcy has a coupon rate of 14% and is quoted at 52. The firm is currently renegotiating the debt, and the lenders have agreed to allow the firm to reduce coupon payments and the principal on the bond to the originally contracted amounts. What is the yield to maturity expected by investors of the bonds at the current price? The bond makes it coupon payments semiannually.
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