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Need answer asap Risky Business' outstanding debt is 7% bonds, paying interest annually and maturing one year from today. The bonds currently settor $564 per
Need answer asap
Risky Business' outstanding debt is 7% bonds, paying interest annually and maturing one year from today. The bonds currently settor $564 per $1,000 par value. The company is experiencing severe financial difficulties and analysts predict that there is a 593 probability that the company will go bankrupt within the year. If bankruptcy occurs, bondholders are predicted to receive only 22% of the promised cash flow (principal plus coupon). a. What is the current promised yield to maturity (assuming that bondholders recelve all promised)? (Round your answer to decimal place. Use minus sign to enter negative values, If any.) Current yield to maturity b. What is the current yield to maturity assuming that default occurs? (Round your answer to 1 decimal pince, Use minus sign to enter negative values, if any.) Current yield to maturity c. What is the current expected yield to maturity? (Round your answer to 2 decimal places. Use minus sign to enter negative values, If any.) Current yield to maturity Step by Step Solution
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