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If 10-year T-bonds have a yield of 6.35%, 10-year corporate bonds yield 21.96%, the maturity risk premium on all 10-year bonds is 2%, and
If 10-year T-bonds have a yield of 6.35%, 10-year corporate bonds yield 21.96%, the maturity risk premium on all 10-year bonds is 2%, and corporate bonds have a 2% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond? Please include % in your answer. Round your answer to 2 decimal places:
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
