Question
Problem 6-13 Determinants of Interest Rates for Individual Securities (LG6-4) Tom and Sues Flowers, Inc.s, 15-year bonds are currently yielding a return of 8.90 percent.
Problem 6-13 Determinants of Interest Rates for Individual Securities (LG6-4)
Tom and Sues Flowers, Inc.s, 15-year bonds are currently yielding a return of 8.90 percent. The expected inflation premium is 2.90 percent annually and the real risk-free rate is expected to be 3.35 percent annually over the next 15 years. The default risk premium on Tom and Sues Flowers bonds is 0.60 percent. The maturity risk premium is 0.55 percent on 5-year securities and increases by 0.09 percent for each additional year to maturity. Calculate the liquidity risk premium on Tom and Sues Flowers, lnc.s, 15-year bonds. (Round your answer to 2 decimal places.)
Liquidity risk premium = ____ %
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Options Trading For Beginners How To Generate Predictable Income And Make A Living Without Taking Big Risks Even If You Re A Complete Beginner
Authors: Greg Middleton
1st Edition
979-8866955046
