A project will have one of the following time 1 payoffs, each with the corresponding probability. $99 with probability 13%. $314 with probability 58%. $506 otherwise. The discount rate is 9.8%. The project is partially financed with debt with a time 1 promised payoff of $218. What is the promised return on the debt? Give your answer in percentage to the nearest 0.1 percent.
A project will have one of the following time 1 payoffs, each with the corresponding probability. $99 with probability 13%. $314 with probability 58%. $506 otherwise. The discount rate is 9.8%. The project is partially financed with debt with a time 1 promised payoff of $218. What is the promised return on the debt? Give your answer in percentage to the nearest 0.1 percent.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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P2)*A project will have one of the following time 1 payoffs, each with the corresponding probability.
$99 with probability 13%.
$314 with probability 58%.
$506 otherwise.
The discount rate is 9.8%. The project is partially financed with debt with a time 1 promised payoff of $218. What is the promised return on the debt? Give your answer in percentage to the nearest 0.1 percent.
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