Question
If 10-year T-bonds have a yield of 5.3%, 10-year corporate bonds yield 12%, the maturity risk premium on all 10-year bonds is 1.5%, and corporate
If 10-year T-bonds have a yield of 5.3%, 10-year corporate bonds yield 12%, the maturity risk premium on all 10-year bonds is 1.5%, and corporate bonds have a 0.3% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond in percent?
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Accounting Principles Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
8th Canadian Edition
978-1119502425
