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In mid-2009. Rite Aid had CCC-rated, 5.year bonds outstanding with a yield to maturity of 17.3%. At the time, similar maturity Treasures had a yield
In mid-2009. Rite Aid had CCC-rated, 5.year bonds outstanding with a yield to maturity of 17.3%. At the time, similar maturity Treasures had a yield of 2%. Suppose the market nisk premium is 6% and you believe Rite Aid's bonds have a beta of 0.30. The expected loss rate of these bonds in the event of default is 50%. What annual probability of default would be consistent with the yield to maturity of those bonds in mid-20097 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 (Do not round until the final answer. Then round to two decimal places.)
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