INTEL Inc. Company applied for a bank loan. Its bond is rated at BBB and traded...
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INTEL Inc. Company applied for a bank loan. Its bond is rated at BBB and traded at 10.5%, whereas the risk free rate is 4.25%. A. What is probability of repayment? and the probability of default? B. Assume that the bank has a recovery rate of 95% for BBB rated bond such as that of INTEL. What is the premium that must be paid by INTEL? and what is the interest rate to be charged by the bank? INTEL Inc. Company applied for a bank loan. Its bond is rated at BBB and traded at 10.5%, whereas the risk free rate is 4.25%. A. What is probability of repayment? and the probability of default? B. Assume that the bank has a recovery rate of 95% for BBB rated bond such as that of INTEL. What is the premium that must be paid by INTEL? and what is the interest rate to be charged by the bank?
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Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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