The bonds of Casino,Inc.,trade in the market at a yield of 10.8%,have a 12% coupon rate,and a promised yield of 14.0%.However,investors only expect Casino to pay in full with 65% probability.What cost of debt should be used in Casino's WACC?
A) 14.0%
B) 10.8%
C) 12.0%
D) 9.1%
Correct Answer:
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