Question
Default Risk Premium A Treasury bond that matures in 10 years has a yield of 4%. A 10-year corporate bond has a yield of 9%.
Default Risk Premium
A Treasury bond that matures in 10 years has a yield of 4%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.55%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
4th Edition
1439078084, 978-1439078082
