What payoff do bondholders expect to receive in the event

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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 56 percent and the probability of a recession is 44 percent. It is projected that the company will generate a total cash flow of $ 211 million in a boom year and $ 82 million in a recession. The company's required debt payment at the end of the year is $ 122 million. The market value of the company's outstanding debt is $ 92 million. The company pays no taxes.

What payoff do bondholders expect to receive in the event of a recession?

Reference no: EM13333288

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