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Go-go Corporation's 10 -year bonds are currently yielding a return of 6.05%. The expected inflation premium is 1.0% annually and the real risk-free rate is
Go-go Corporation's 10 -year bonds are currently yielding a return of 6.05%. The expected inflation premium is 1.0% annually and the real risk-free rate is expected to be 2.10% annually over the next 10 years. The liquidity risk premium on the bonds is 0.25%. The maturity risk premium is 0.10% on two-year securities and increases by 0.05% for each additional year to maturity. Using a spreadsheet, calculate the default risk premium on Go-go Corporation's 10-year bonds. In a textbox, name and show the formula you would use. In a separate textbox, define each of the risk premiums and explain which of the risk premiums can be influenced by the corporation, and which of the risk premiums can not be influenced by the corporation
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