1. Default probability What problems are you likely to encounter when using a market-based approach for estimating the probability that a company will default? 2. Default option How much would it cost...

1. Default probability What problems are you likely to encounter when using a market-based approach for estimating the probability that a company will default?

2. Default option How much would it cost you to insure the bonds of Backwoods Chemical against default? (See Section 23-1.)

May 26, 2022