A government bond that matures in 10 years has a yield of 6%. A 10-year corporate bond

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A government bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

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Financial Management Theory and Practice

ISBN: 978-0176517304

2nd Canadian edition

Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason

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Question Posted: May 02, 2016 11:20 AM

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A government bond that matures in 10 years has a yield of 6%. A 10-year corporate bond

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Financial Management Theory and Practice

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