Question $10$Mandatory$1$ point$$

Poor Cash $\backslash$Co$$is running short of cash$$It has only one bond currently outstanding$$The bond has a three$$year maturity$$no coupon$$and face value $$100$It is currently trading at $$46$It is estimated that Poor Cash will likely go bankrupt with $50\%$ probability in three year$$ and in that case$$the bondholders only expect to recover $10\%$ of the face value$$What is the implied cost of debt$$

$1734\backslash$

$10\mathrm{.}24\%$

$2954\backslash$

$614\backslash$