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Assume a company has the following values: At = $6,000; ut=0.03 per year; r =0.01 per year; K = $4500; time to maturity of debt,
- Assume a company has the following values: At = $6,000; ut=0.03 per year;
r =0.01 per year; K = $4500; time to maturity of debt, T t = 1 year; and = 0.4 per year. Estimate the expected loss and the present value of the expected loss on this debt:
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