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Lam Research Corporation has just announced that their debt has been downgraded and is now rated CCC. This news has made the price of Lams
Lam Research Corporation has just announced that their debt has been downgraded and is now rated CCC. This news has made the price of Lams bonds drop to $500. Historically, CCC rated debt defaults 12.2% of the time. If Lam defaults on their debt, bond holders can expect to lose $0.50 for each dollar invested. Given no other changes regarding Lams debt from the previous question, what is the cost of Lams debt now?
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