Hershey's decides to start using a compostable material in which to wrap their chocolate. unfortunately, this material begins breaking down once it comes in contact with cocoa butters and then bonds to the chocolate, rendering it inedible. further, this was not discovered until after the nationwide roll out of this new product, costing the company millions in dollars and tremendous loss of customer good will. the product development team was summarily fired for not considering which source of corporate risk?

Bonds often pay a coupon twice a year. for the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. using the values of cash flows and number of periods, the valuation model is adjusted accordingly. assume that a $1,000,000 par value, semiannual coupon us treasury note with three years to maturity has a coupon rate of 3%. the yield to maturity (ytm) of the bond is 7.70%. using this information and ignoring the other costs involved, calculate the value of the treasury note: