Question
1) A company has a Default risk 5%, Liquidity premium of 3% and Maturity premium of 1%. Assuming that risk free interest rate is 3%,
1) A company has a Default risk 5%, Liquidity premium of 3% and Maturity premium of 1%. Assuming that risk free interest rate is 3%, whats the cost of debt for this company? ( cost of debt : rd = Rf + DRP +LP +MP )
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk
11th Edition
0324422865, 978-0324422863
