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Business, 23.10.2020 15:50 mkpayton2006

Assume CRT debtholders 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 debtholders are willing to pay $25.50 today to purchase this debt, what is the promised return to those debtholders?

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Assume CRT debtholders are promised payments in one year of $35 if the firm does well and $20 if the...
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