Question
A zero-coupon, five-year annual corporate bond has a par value of $1000. The estimated risk-neutral probability of default for each year is 3%, and the
A zero-coupon, five-year annual corporate bond has a par value of $1000. The estimated risk-neutral probability of default for each year is 3%, and the recovery rate is 30%. Assume that the government bond yield curve is flat at 2%, what is the bond price?
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
