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b . Suppose that investors believe that Castles can make good on the promised coupon payments but that the company will go bankrupt when the
b Suppose that investors believe that Castles can make good on the promised coupon payments but that the company will go bankrupt when the bond matures and the principal comes due. The expectation is that investors will receive only of face value at maturity. If they buy the bond today, what yield to maturity do they expect to receive?
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