Question
A Treasury bond that matures in 20 years has a yield of 8%. A 20-year corporate bond has a yield of 11%. Assume that the
A Treasury bond that matures in 20 years has a yield of 8%. A 20-year corporate bond has a yield of 11%. Assume that the liquidity premium on the corporate bond is 1.0%. What is the default risk premium on the corporate bond?
PLEASE SHOW WORK, EXPLANATION ,AND EQUATIONS
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Financial Management An Introduction
Authors: Jim McMenamin
1st Edition
0415181623, 9780415181624
