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Holly Berry Incorporated Debtholders Are Promised Payments of $25 If

Question 35

Multiple Choice

Holly Berry Incorporated debtholders are promised payments of $25 if the firm does well,but will receive only $20 if the firm does poorly. Bondholders are willing to pay $15. The promised return to the bondholders is approximately:


A) 5.65%
B) 45.65%
C) 50.00%
D) 66.67%
E) 100.00%

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