Question
If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 8.9%, the maturity risk premium on all 10-year bonds is 1.3%, and corporate
If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 8.9%, the maturity risk premium on all 10-year bonds is 1.3%, and corporate bonds have a 0.2% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?
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Financial Management For Decision Making
Authors: Harold Jr. Bierman, Seymour Smidt
1st Edition
1587982129, 9781587982125
