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YMMV Inc. issues a bond with a face value of $40,000,000 with a coupon rate of 10.000% maturing in 10 years. The current yield rate

YMMV Inc. issues a bond with a face value of $40,000,000 with a coupon rate of 10.000% maturing in 10 years. The current yield rate is r(12) = 8.000%. TFC will secure the bond by making quarterly deposits into a sinking fund paying 3.750% compounded semi-annually. YMMV defaults on the bond after 7 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?image text in transcribed

YMMV Inc. issues a bond with a face value of $40,000,000 with a coupon rate of 10.000% maturing in 10 years. The current yield rate is r(12) = 8.000%. TFC will secure the bond by making quarterly deposits into a sinking fund paying 3.750% compounded semi-annually. YMMV defaults on the bond after 7 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. $13,525,632.76. O b. $15,546,704.32. O c. $12,281,896.41. O d. $14,924,836.15. O e. $14,302,967.97

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