Risky Business outstanding debt is 4% bonds, paying interest annually and maturing one year from today. The bonds currently sell for $585 per $1,000 par value. The company is experiencing severe financial difficulties and analysts predict that there is a 59% probability that the company will go bankrupt within the year. If bankruptcy occurs, bondholders are predicted to receive only 34% of the promised cash flow (principal plus coupon).

a. What is the current promised yield to maturity (assuming that bondholders receive all promised)? (Round your answer to 1 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 place. 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