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Crash Inc. has 15-year bonds and they have an equilibrium rate of return of 9%. For all securities, the inflation premium is 1.90 percent and
Crash Inc. has 15-year bonds and they have an equilibrium rate of return of 9%. For all securities, the inflation premium is 1.90 percent and the real risk-free rate is 2.7 percent. The securitys liquidity risk premium is 0.40 percent and maturity risk premium is 0.75 percent. The security has no special covenants. Calculate the bonds default risk premium.
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