During the recession in mid-2009, homebuilder KB Home had outstanding 6-year bonds with a yield to maturity

Question:

During the recession in mid-2009, homebuilder KB Home had outstanding 6-year bonds with a yield to of 8.5% and a BB rating. If corresponding risk-free rates were 3%, and the market risk premium was 5%, estimate the of KB Home’s debt using two different methods. How do your results compare?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...