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Company plans to issue 10 year bonds to finance their new project. They are trying to figure out what coupon rate to offer to the

Company plans to issue 10 year bonds to finance their new project. They are trying to figure out what coupon rate to offer to the investors. Current 10-year Tbond rate is 2%. Their investment banker has recommended default risk premium of 2.2%, liquidity and premium of 0.8%. Inflation is estimated to be 1.8%.

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