Question
A Corporation's 20-year bonds have an equilibrium rate of return is 10.00 percent. For all securities, the inflation risk premium is 1.51 percent and the
A Corporation's 20-year bonds have an equilibrium rate of return is 10.00 percent. For all securities, the inflation risk premium is 1.51 percent and the real interest rate is 3.26 percent. The security's liquidity risk premium is .31 percent and maturity risk premium is .76 percent. The security has no special covenants. What is the bond's default risk premium?
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Essentials Of Accounting For Governmental And Not-for-Profit Organizations
Authors: Paul A Copley
11th Edition
0078025451, 9780078025457
