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Aboitiz Equity Ventures issued a 7-year bond with a par value of P50,000 that pays a coupon of 8.47%. Coupon payments will be made
Aboitiz Equity Ventures issued a 7-year bond with a par value of P50,000 that pays a coupon of 8.47%. Coupon payments will be made annually. Investors required rate of return is composed of: real risk free rate of 1.5%; inflation premium of 4.5%; default risk premium of 2%; liquidity premium of 1.5%; and maturity risk premium of 2%. The required rate of return would be?
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
