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A company wants to issue an unsecured bond at 9.5% interest to cover the risk of default to investors. If the probability of default for

A company wants to issue an unsecured bond at 9.5% interest to cover the risk of default to investors. If the probability of default for this bond is 15% and the recovery rate for unsecured bondholders is just 30%, what is the expected annual return bondholders will face when investing in this bond?

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