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Questi Koy Corporation's 15-year bonds yield 12.50%. The real risk-free rate is 3.0%, the inflation premium for 5-year bonds is 1.75%, the liquidity premium for
Questi Koy Corporation's 15-year bonds yield 12.50%. The real risk-free rate is 3.0%, the inflation premium for 5-year bonds is 1.75%, the liquidity premium for Koy's bonds is 0.75% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = 0.1%(t - 1), where t = number of years to maturity. What is the default risk premium on Koy's bonds? 5.10% 4.90% 5.60% 5.20% 5.00%
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