Business, 21.02.2020 02:14 tylerineedhelp

During the recession in mid-2009, homebuilder KB Home had outstanding 5-year bonds with a yield to maturity of 8.7 % and a BB rating. If corresponding risk-free rates were 3.2 %, and the market risk premium was 4.7 %, estimate the expected return of KB Home's debt using two different methods. How do your results compare?

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During the recession in mid-2009, homebuilder KB Home had outstanding 5-year bonds with a yield to m...