Question
The 1-year bonds of Casino, Inc., have a 10.9 percent coupon rate and trade in the market at a yield of 12.2 percent. There is
The 1-year bonds of Casino, Inc., have a 10.9 percent coupon rate and trade in the market at a yield of 12.2 percent. There is a 4.4 percent chance that Casino will default and pay nothing. What cost of debt should be used in Casino's WACC? please describe the logic behind the calculation, I am just unsure if yield also reflects the chances of default, please clear out the confusion.
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Project Finance In Theory And Practice Designing Structuring And Financing Private And Public Projects
Authors: Stefano Gatti
4th Edition
032398360X, 9780323983600
