Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 80 percent and the probability of a recession is 20 percent. It is projected that the company will generate a total cash flow of $192 million in a boom year and $83 million in a recession. The company's required debt payment at the end of the year is $117 million. The market value of the company’s outstanding debt is $90 million. The company pays no taxes. a. What payoff do bondholders expect to receive in the event of a recession? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i. e. 1,234,567.)
Payoff $
b. What is the promised return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e. g., 32.16))
Promised return %
c. What is the expected return on the company's debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e. g., 32.16))
Expected return %

a. The payoff do bonholders expect to receive in the event of a recession=$83 million

b. The promised return is 0.30

c. The expected return is -16%

Explanation:

a. According to the given data the payoff do bonholders expect to receive in the event of a recession=$83 million

b. In order to calculate the promised return on the company's debt we would have to use the following formula:

promised return=(face value of debt/market value of debt)-1

promised return=($117 million/$90 million)-1

promised return=0.30

c. To calculate the expected return on the company's debt we would have to use the following formula:

expected vale of debt=($117*80%)+($90*20%=

=75.6 million

expected return=(75.6 million/$90 million)-1

expected return=-16%

answer: penis

explanation:

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.