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The Dunley Comp plans to issue 5 year bonds, it believes the bonds will have a BBB rating Suppose AAA bonds with the same maturity have a 4% yield if the market tisk premium es 6% using the data in the tables a. Estimate the yield Donley will have to pay, assuming an expected 62% loss rate in the event of default during average economic limes. What spread ovir AAA bonds whi at have to pay?. b. Entimate the yield Dunley would have to pay it it were a recoscion, assuming the expected loss rate is 85% at that time but the beta of debt and market risk premium are the sarne as in avezage economic times. What is Duniey's spread over AM now? c. In fact, one might expect risk premia and betas to increase in receselans. Redo part (b) assuming that the market risk premturn and the beta of debt both inciease by 20%, that is they equal 1.20 times their value in recestions Data table a. Estimate the yield Dunley will have to pay, a (Click on thes folowing icon of in order to copy its contente into a spreadaheet) por? The yied Dunley wilt have to pay in 4 (Rece