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2. Problem 6.11 (Default Risk Premium) eBook A company's 5-year bonds are yielding 6% per year. Treasury bonds with the same maturity are yielding 4.8%

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2. Problem 6.11 (Default Risk Premium) eBook A company's 5-year bonds are yielding 6% per year. Treasury bonds with the same maturity are yielding 4.8% per year, and the real risk-free rate (r) is 2.65%. The average inflation premium is 1.75%, and the maturity risk premium is estimated to be 0.1 x (t-1), where t-number of years to maturity. If the liquidity premium is 0.6%, what is the default risk premium on the corporate bonds? Round your answer to two decimal places. Grade it Now Save & Continue Continue without saving

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