please complete all parts to the problem

The Dunley Corp.plans to issue 5-year bonds. It believes the bonds will have a BBB rating. Suppose AAA bonds with the same maturity have 24% yield. If the market rak premium is using the data in the tables a. Estimate the yield Dunley will have to pay, assuming an expected 52% loss rate in the event of default during average economic times. What spread over AAA bonds will have to pay? b. Estimate the yield Durley would have to pay if it were a recession, assuming the expected loss rate la 73% at that time but the beta of debt and market risk premium are the same as in average economic times. What c. In fact, one might expect risk premia and betas to increase in recessions. Redo part (b) assuming that the market risk premium and the beta of debt both increase by 20%, that is they qual1 20 times their value in recessions Estimate the yield Durley will have to pay, assuming an expected 52%105 rate in the event of default during average economic times. What spread over AAA bonds will have to pay? The yield Durley will have to pay ). (Round to two decimal places) ve to pay, assuming an expected 52% loss rate in the event of default during average economic times. What spread over AAA bonds will it have to pa have to pay if it re the same as i Data Table X mia and betas 10%, that is they ve to pay, assur Vill it have to pa -0%. (Round (Click on the icons located on the top-right comer of the data tables below in order to copy their contents into a spreadsheet.) Annual Default Rates by Debt Rating (1983-2011) Rating: AAA AA BBB BB B CC-C Default rate: Average 0.0% 0.1% 0.2% 0.5% 2.2% 5.5% 12.2% 14.1% In recessions 0.0% 1.0% 3.0% 3.0% 8.0% 16.0% 48.0% 79.0% Source: "Corporate Defaults and Recovery Rates, 1920-2011," Moody's Global Credit Policy, February 2012. Average Debt Betas by Rating and Maturity By rating A and above BBB BB B Average beta 15 Yr Average beta 0.01 0.06 0.07 0.14 Source: S. Schaefer and I. Strebulaev, "Risk in Capital Structure Arbitrage." Stanford G$B working paper, 2009 Print Done - box and then click Check