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A company issues a zero coupon bond for one year and pays 100 m. ISK on the due date of the bond if bankruptcy does

A company issues a zero coupon bond for one year and pays 100 m. ISK on the due date of the bond if bankruptcy does not occur. The probability of default (probability and default) of the company next year is 10% and the recovery rate is R=50% of the promised payment, the risk-free interest rate for one year is r = 5%, the risk premium of the market is 7% and the beta of debt the company's beta D =0.3.


At what price should the bond be sold, if it is priced according to the CAPM model?

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