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The real risk-free rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 3% per year for each of the
The real risk-free rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 3% per year for each of the nex 2% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the security's maturity. The liquidity premium (LP) on all Moq Computer Corp.'s bonds is 0.55%. The following table shows the current relationship between bond ratings and default is required, use the arithmetic average. 6.35% 7.75% 7.20% 5.55%
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