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In mid-2009, Rite Aid had CCC-rated, 10-year bonds outstanding with a yield to maturity of 17.3 % At the time, similar maturity Treasuries had a

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In mid-2009, Rite Aid had CCC-rated, 10-year bonds outstanding with a yield to maturity of 17.3 % At the time, similar maturity Treasuries had a yield of 4 % Suppose ua the market risk premium is 6 % and you believe Rite Aid's bonds have a beta of 0.31. The expected loss rate of these bonds in the event of default is 54 % a. What annual probability of default would be consistent with the yield to maturity of these bonds in mid-2009? b. In mid-2015, Rte-Aid's bonds had a yield of 7.3 % , while similar maturity Treasuries had a yield of 1.3 % What probability of default would you estimate now? 015 abil a. What annual probability of default would be consistent with the yield to maturity of these bonds in mid-2009? The required return for this investment is% (Round to two decimal places) t A cybai 1152 A) Rd B) pi Com

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