Rearden Metal has a bond issue outstanding with ten years to maturity, a yield to maturity of 8.6%, and a B rating. The corresponding risk-free rate is 3% and the market risk premium is 6%. Assuming a normal economy, the expected return on Rearden Metal's debt is closest to: a. 0.6%
b. 1.6%
c. 4.6%
d. 6.0%

c. 4.6%

Explanation:

the question is incomplete, since it is missing the average beta for B rated bonds, so I looked for similar questions: average beta for B bonds = 0.26 and since we are assuming a normal economy, we should use it:

the expected return on the bonds = risk free rate + (average beta of B rated bonds x risk premium)

expected return = 3% + (0.26 x 6%)

expected return = 3% + (0.26 x 6%) = 3% + 1.56% = 4.56% ≈ 4.6%

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

hope this

answer; ///i believe the correct   answer is (e) transformational;