Wayne Enterprise has two types of debt: senior debt and junior debt. Junior creditor will get paid only after senior creditor is fully paid.

The company has the following balance sheet.

Total asset 2000	Senior debt 700
	Junior debt 300
	Equity 1000

Both types of debt have 5 year maturity and one-time interest payment of 10% at the maturity. The market value of the asset is $1200 and the

standard deviation of asset return is 45% per year. Risk-free rate is 9%.

a) What is the yield of senior debt?

b) What is the yield of junior debt?