Question: BBB BB B CCC Consider the following information regarding corporate bonds: Rating AAA AA A Average Default Rate 0.0% 0.1% 0.2% Recession Default Rate 0.0%

BBB BB B CCC Consider the following information regarding corporate bonds: Rating AAA AA A Average Default Rate 0.0% 0.1% 0.2% Recession Default Rate 0.0% 1.0% 3.0% Average Beta 0.05 0.05 0.05 0.5% 2.2% 5.5% 12.2% 3.0% 8.0% 16.0% 48.0% 0.10 0.17 0.26 0.31 Market Capitalization ($mm) $4500 Total Enterprise Value ($mm) Debt Rating Equity Beta 1.1 $8000 BBB Company Transcontinental Rearden Metal Wyatt Oil $3800 $7200 1.3 AAA $2400 $3800 0.9 Nielson Motors $1500 $4400 1.75 BB The asset beta for Rearden Metal is

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