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Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the table below. Happy Time now only
Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the table below. Happy Time now only has one outstanding debt with a face value of $110 million to be repaid in the next year. The current market value for the debt is $67 million. The tax rate is zero. If you invest in the corporate debt of Happy Time Inc. today, what is your expected percentage return on this investment? A. 36.87% B. 26.37% C. 64.8% D. 16.63%
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