Assume a firmrsquos debt holders are promised payments in, Financial Management

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Assume a firmrsquos debt holders are promised payments in

Assume a firm’s debt holders are promised payments in one year of $35 if the firm does well and $20 if the firm does poorly. There is a 50/50 chance of the firm doing well or poorly. If bondholders are willing to pay $25.50, what is the promised return to those bondholders?

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Financial Management: Assume a firmrsquos debt holders are promised payments in

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