Question
(Calculating the default-risk premium) At present, 10-year Treasury bonds are yielding 4.1% while a 10-year corporate bond is yielding 6.8%. If the liquidity-risk premium on
(Calculating the default-risk premium) At present, 10-year Treasury bonds are yielding 4.1% while a 10-year corporate bond is yielding 6.8%. If the liquidity-risk premium on the corporate bond is 0.3%, what is the corporate bond's default-risk premium? Note that a Treasury security should have no default-risk premium and liquidity-risk premium.
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Analysis For Financial Management
Authors: Robert Higgins
7th Edition
0072863641, 9780072863642
