Question
Assume that interest rates on 20-year Treasury and corporate bonds are as follows: T-bond = 7.72% A rated bond = 9.64% AAA rated bond =
Assume that interest rates on 20-year Treasury and corporate bonds are as follows: T-bond = 7.72% A rated bond = 9.64% AAA rated bond = 8.72% BBB rated bond =10.18% The differences in rates among these issues were caused primarily by:
| A. Tax effects | ||
| B. Maturity risk differences | ||
| C. Default risk differences | ||
| D. Inflation differences | ||
| E. Real risk-free rate tax differences |
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Financial Management And Policy
Authors: James C. Van Horne
12th Edition
0130326577, 9780130326577
