Question
If Akatsuki Corp is a AAA firm issuing a 10-year bond to raise funds for an upcoming project. The nominal risk free rate is 3%,
If Akatsuki Corp is a AAA firm issuing a 10-year bond to raise funds for an upcoming project.
The nominal risk free rate is 3%, inflation is 2%, and the maturity premium for a 10-year bond is 1.5%.
Risk premium for a AAA corporate bond is 0.75%, for AA 0.85% and for A is 0.95%. The liquidity premium for Akatsuki Corp is 2%, what would investors expect to earn when buying the bond?
*Enter the value of the interest rate without % sign
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Value Investing
Authors: Mike Hartley
1st Edition
979-8864443309
