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Justice L. Corp has a 6 year bond outstanding with a yield to maturity of 7.7%. The bonds are rated B, which implies a 5.5%

Justice L. Corp has a 6 year bond outstanding with a yield to maturity of 7.7%. The bonds are rated B, which implies a 5.5% default rate. If the bonds are unsecured (60% expected loss in the event of default), what is your estimate for the expected return for a Justice Bond?

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