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YMMV Inc. issues a bond with a face value of $5,000,000 with a coupon rate of 1.750% maturing in 20 years. The current yield rate
YMMV Inc. issues a bond with a face value of $5,000,000 with a coupon rate of 1.750% maturing in 20 years. The current yield rate is r(12) = 8.000%. TFC will secure the bond by making semi-annual deposits into a sinking fund paying 2.250% compounded annually. YMMV defaults on the bond after 18 years (just after making their coupon payment, and sinking fund deposit). The bondholders receive the balance in the sinking fund. How much money do they lose? O a. $31,000.72. O b. $29,354.67. Oc. $26,062.55. O d. $27,434.27. O e. $25,239.53
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