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Interest premium. Shaky Company has just issued a five-year bond with a yield of 9%; Stable Company has issued an identical fro-year bond, but with
Interest premium. Shaky Company has just issued a five-year bond with a yield of 9%; Stable Company has issued an identical fro-year bond, but with a yiold of 7%. Why did the market demand a higher return from Shaky? (Select tine best response.) A. Companies with poor financlais tend to compensate investors foe the systematco risk by issuing bonds with high yields. B. Companias with poof financials tend to compensate investoes for the infiation risk by issuing bonds with high yields. C. Comparias with poor financials tend to compensate investors for the fiquidity risk by issuing bonds with high ylelds. D. Companies with poot financials tend to compenate investors foc the defail risk by issuing bonds with high yields
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