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A treasury bond that matures in 10 years has a yield of 4.25%. A 10 year corporate bond has a yield of 9.75%. Assume that
A treasury bond that matures in 10 years has a yield of 4.25%. A 10 year corporate bond has a yield of 9.75%. Assume that the liquidity premium on the corporate bond is 0.75%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
15th edition
134796551, 134796550, 978-0134796550
