Problem 17 Intro Empress Inc. has issued a bond with a face value of $1,000...
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Problem 17 Intro Empress Inc. has issued a bond with a face value of $1,000 and an interest rate of 7% to fund a new project. The bond is secured by the cash flows from the project, which will be $950 with a probability of 30% and $1,200 otherwise. Assume risk neutrality. Part 1 |- Attempt 1/3 for 10 pts. What is the appropriate cost of capital for the project? 4+ decimals Submit Problem 17 Intro Empress Inc. has issued a bond with a face value of $1,000 and an interest rate of 7% to fund a new project. The bond is secured by the cash flows from the project, which will be $950 with a probability of 30% and $1,200 otherwise. Assume risk neutrality. Part 1 |- Attempt 1/3 for 10 pts. What is the appropriate cost of capital for the project? 4+ decimals Submit
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