Question
Default Risk Premium A Treasury bond that matures in 10 years has a yield of 5%. A 10-year corporate bond has a yield of 8.75%.
Default Risk Premium
A Treasury bond that matures in 10 years has a yield of 5%. A 10-year corporate bond has a yield of 8.75%. Assume that the liquidity premium on the corporate bond is 0.7%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
16th edition
1337902608, 978-1337902601
