Yield to maturity on bonds-grummon corporation

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Grummon Corporation has issued? zero-coupon corporate bonds with a? five-year maturity? (assume $100 face value? bond). Investors believe there is a 10% chance that Grummon will default on these bonds. If Grummon does? default, investors expect to receive only 45 cents per dollar they are owed. If investors require a 6% expected return on their investment in these? bonds, what will be the

a. price of these? bonds?

b. yield to maturity on these? bonds?

?Note: Assume annual compounding.

Reference no: EM132538079

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