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Problem 6.11 (Default Risk Premium) Question 6 of 10 Check My Work (1 remaining) eBook A company's 5-year bonds are ylelding 7% per year. Treasury

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Problem 6.11 (Default Risk Premium) Question 6 of 10 Check My Work (1 remaining) eBook A company's 5-year bonds are ylelding 7% per year. Treasury bonds with the same maturity are yielding 5.3% per year, and the real risk-free rate (*) is 2.50%. The average inflation premium is 2.40%, and the maturity risk premium is estimated to be 0.1 x (t-1)%, where t = number of years to maturity. If the liquidity premium is 0.55%, what is the default risk premium on the corporate bonds? Round your answer to two decimal places %

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