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Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is

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Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 50 percent and the probability of a recession is 50 percent. It is projected that the company will generate a total cash flow of $126 million in a boom year and $78 million in a recession. The company's required debt payment at the end of the year is $75 million. The market value of the company's outstanding debt is $58 million. The company pays no taxes. What is the expected rate of return on the company's debt? A. 29.3% B. 100% C. 34.5% D. 0

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