Rearden Metal has a bond issue outstanding with ten years to maturity,a yield to maturity of 8.6%,and a B rating.The bondholders expected loss rate in the event of default is 50%.Assuming the economy is in recession,then the expected return on Rearden Metal's debt is closest to:
A)0.6%.
B)1.6%.
C)4.6%.
D)6.0%.

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The Answer of Rearden Metal has a bond issue outstanding with ten years to maturity,a yield to maturity of 8.6%,and a B rating.The bondholders expected loss rate in the event of default is 50%.Assuming the economy is in recession,then the expected return on Rearden Metal's debt is closest to:
A)0.6%.
B)1.6%.
C)4.6%.
D)6.0%.

Rearden Metal Has a Bond Issue Outstanding with Ten Years