Question 1 0.04 points Save Answer Use the following information to answer the question(s) below. Consider the following information regarding corporate bonds: Rating AAA Average Default Rate 0.0% Recession Default Rate 0.0% Average Beta 0.05 AA 0.1% 1.0% 0.05 A 0.2% 3.0% 0.05 BBB 0.5% 3.0% 0.10 2.2% 8.0% 0.17 B CCC 5.5% 12.2% 16.0% 48.0% 0.31 0.26 Wyatt Oil has a bond issue outstanding with seven years to maturity, a yield to maturity of 7.0%, and a BBB rating. The bondholders' expected loss rate in the event of default is 70%. Assuming the economy is in recession, then the expected return on Wyatt Oil's debt is closest to: O 7.0%. O 4.9%. O 5.5%. 3.5%. Question 3 Use the following information to answer the question(s) below. Next Period's Expected Asset Division of Wyatt Oil Expected Free Growth Beta Cash Rate Flow ($mm) Oil Exploration 1.4 450 4.0% Oil Refining 1.1 525 2.5% Gas & Convenience Stores 0.8 600 3.0% The risk-free rate of interest is 3% and the market risk premium is 5%. The overall cost of capital for Wyatt Oil is closest to: O 8.8% O 8.1%. O 9.3%. O 8.5%. Use the following information to answer the question(s) below. Consider the following information regarding corporate bonds: Rating AAA Average Default Rate 0.0% Recession Default Rate 0.0% Average Beta 0.05 AA 0.1% 1.0% 0.05 A 0.2% 3.0% 0.05 BBB 0.5% 3.0% 0.10 2.2% 8.0% 0.17 B CCC 5.5% 12.2% 16.0% 48.0% 0.26 0.31 Wyatt Oil has a bond issue outstanding with seven years to maturity, a yield to maturity of 7.0%, and a BBB rating. The corresponding risk-free rate is 3% and the market risk premium is 5%. Assuming a normal economy, the expected return on Wyatt Oil's debt is closest to: O 3.5%. 3.0%. 4.9%. 5.5%. Question 9 0.04 points Save Answer Use the following information to answer the question(s) below. Consider the following information regarding corporate bonds: Rating AAA Average Default Rate 0.0% Recession Default Rate 0.0% Average Beta 0.05 AA 0.1% 1.0% 0.05 0.2% 3.0% 0.05 BBB 0.5% 3.0% 0.10 2.2% 8.0% 0.17 B CCC 5.5% 12.2% 16.0% 48.0% 0.26 0.31 Nielson Motors plans to issue 10-year bonds that it believes will have a BBB rating. Suppose AAA bonds with the same maturity have a 3.5% yield. Assume that the market risk premium is 5% and the expected loss rate in the event of default on the bonds is 60%. The yield that these bonds will have to pay during average economic times is closest to: O 3.75%. O 5.50%. O 3.50%. 04.00%