3. ABC buys a very risky corporate bond with a par value of $1000. It has a 16.0% coupon and…

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3. ABC buys a very risky corporate bond with a par value of $1000. It has a 16.0% coupon and matures in 8 years. They pay only $600 for the bond. a) They receive the coupon payments for three years and the bond defaults. After liquidating the firm, the bondholders receive a distribution of $150 per bond at the end of 3.5 years. What is the realized return on ABC’s investment?

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