Shaky Company has just issued a five-year bond with a yield of 9%; Stable Company has issued

Question:

Shaky Company has just issued a five-year bond with a yield of 9%; Stable Company has issued an identical five-year bond but with a yield of 7%. Why did the market demand a higher return from Shaky?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: