Justice L. Corp has a 6 year bond outstanding with a yield to maturity of 7.7%. The bonds are rated B, which implies a 5.5% default rate. If the bonds are unsecured (60% expected loss in the event of default), what is your estimate for the expected return for a Justice Bond?

Answer rating: 100% (QA)

To calculate the expected return for a Justice Bond we need to take into account the yield to maturi... View the full answer