Use the option data from July 23, 2009 in the table, to determine the rate Google would have paid if it had issued $98.29 billion in zero-coupon debt due in January 2011. Suppose Google currently had 307.17 million sharesoutstanding, implying a market value of $128.45 billion. Risk-free rate is 1.2% (Assume perfect capital markets.)

a. The yield on Google debt is ___ %.

b. The credit spread Google would have to pay is ___ %.

GOOG Jul 13 2009 Calls 418.18 +7.87 13:10 EST Vol 2177516 Open Int Bid Ask 100 82 172 103 98 408 63 11 Jan 150.0 (OZF AJ) 11 Jan 160.0 (OZF AL) 11 Jan 200.0 (OZF AA) 11 Jan 250.00 (OZF AU) 11 Jan 280.0 (OZF AX) 11 Jan 300.0 (OZF AT) 11 Jan 320.0 (OZF AD) 11 Jan 340.0 (OZF AI) 11 Jan 350.0 (OZF AK) 11 Jan 360.0 (OZF AM) 11 Jan 380.0 (OZF AZ) 11 Jan 400.0 (OZF AU) 11 Jan 420.0 (OZF AG) 11 Jan 450.0 (OZF AV) 276.90 264.50 267.520 231.20 188.80 165.00 150.10 135.90 122.60 116.10 110.00 98.00 87.00 76.90 63.30 273.60 228.90 186.50 162.80 148.20 133.90 120.50 114.10 107.90 95.80 85.10 74.60 61.80 269 2577 379