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Default risk premium 1 . Scanlon Corporation's 5 - year bonds yield 6 . 0 0 % and 5 - year T - bonds yield
Default risk premium
Scanlon Corporation's year bonds yield and year Tbonds yield The real riskfree rate is r the inflation premium for year bonds is IP the liquidity premium for Scanlons bonds is LP versus zero for Tbonds, and the maturity risk premium for all bonds is found with the formula MRP t times where t number of years to maturity. What is the default risk premium DRP on Scanlons bonds?
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