Question
A Treasury bond that matures in 10 years has a yield of 5.5%. A 10-year corporate bond has a yield of 7.75%. Assume that the
A Treasury bond that matures in 10 years has a yield of 5.5%. A 10-year corporate bond has a yield of 7.75%. Assume that the liquidity premium on the corporate bond is 0.3%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
