Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The bonds issued by 3G Solar Corp. are currently rated BBB by S&P. Assuming the risk-free rate is 2%, what is the good estimate for

image text in transcribed
The bonds issued by 3G Solar Corp. are currently rated BBB by S&P. Assuming the risk-free rate is 2%, what is the good estimate for 3G Solar's cost of debt? 6.5 For developed market firms with market cap> $5 billion If interest coverage ratio is sto Rating is Spread is 8.50 100000 Aaa AAA 0.63% 8.499999 Aa2 AA 0.78% 5.5 6.499999 A1A 0.98% 4.25 5.499999 A2/A 1.08% 3 4.249999 A3/A 1.22% 2.3 2.999999 Baa2 BBB 1.56% 2.25 2.249999 Bal BB- 2.00% 2 2.2499999 Ba2 BB 2.40% 1.75 1.999999 B1/B- 3.31% 1.5 1.749999 B2B 4.21% 1.25 1.499999 B3 B- 5.15% 0.8 1.249999 Caa CCC 8.20% 0.65 0.799999 Ca2/CC 8.64% 0.2 0.649999 C2/C 11.34% - 100000 0.199999 D2D 15.12% 3.56% 7.25%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Growing Enterprises

Authors: Edward W. Davis, Roger Buckland

1st Edition

1138679941, 978-1138679948

More Books

Students also viewed these Finance questions

Question

Composition of the U.S. workforce by profession

Answered: 1 week ago