The TrunkLine Company debtholders are promised payments of $35 if the firm does well,but will receive only $20 if the firm does poorly. Bondholders are willing to pay $25. The promised return to the bondholders is approximately:
A) 2.9%
B) 16.9%
C) 27.3%
D) 40.0%
E) 100%

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The Answer of The TrunkLine Company debtholders are promised payments of $35 if the firm does well,but will receive only $20 if the firm does poorly. Bondholders are willing to pay $25. The promised return to the bondholders is approximately:
A) 2.9%
B) 16.9%
C) 27.3%
D) 40.0%
E) 100%

The TrunkLine Company Debtholders Are Promised Payments of $35 If