Question
A Treasury bond that matures in 10 years has a yield of 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%. A 10-year corporate bond has a yield of 7.75%. Assume that the liquidity premium on the corporate bond is 0.4%. What is the default risk premium on the corporate bond?
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How To Understand Business Finance
Authors: Bob Cinnamon, Brian Helweg-Larsen
2nd Edition
0749460202, 978-0749460204
