Saskatchewan Wheat Fields Inc

question 52

Multiple Choice

Saskatchewan Wheat Fields Inc.is planning to issue $100 million of commercial paper with 30 days to maturity.The quoted rate for the issue is 8%.There is a 3% probability that the firm will default on the issue and the investor will receive zero.If the investor's required rate of return is 5%, then the value of the issue is:

• A)$100 million
• B)$99.77 million
• C)$99.59 million
• D)$97.24 million

---

Definitions:

Low-Growth Markets

Markets characterized by small or stagnant growth rates, making them challenging environments for businesses to achieve high returns.

Market Growth Rate

The increase in size or sales of a market over a specific period.

BCG Matrix

A strategic planning tool that uses market growth rate and market share to categorize the business units or products of a corporation into four quadrants.

Attractiveness

The appeal or desirability of something, often used in marketing to describe how appealing a product, service, or brand is to its target audience.