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Hi! I need help with this. Thank you :) The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected

Hi! I need help with this. Thank you :)

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The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be 8% per year for each of the next four years and 7% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t 1)%, where t is the security's maturity The liquidity premium (LP) on all Tahoe Hydroponics's bonds is 0.55%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Default Risk Premium Rating U.S. Treasury 0.60% 0.80% 1.05% 1.45% Tahoe Hydroponics issues eight-year, AA-rated bonds. What is the yield on one of these bo Disregard cross-product terms; that is, if averaging is required, use the arithmetic average O 11.80% O 11.65% 12.35% 4.85% O

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