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Zoom Inc's 6-year bonds yield 6.50%. The real risk-free rate is r* = 0.5%, the default risk premium for Zoom's bonds is DRP = 0.40%,
Zoom Inc's 6-year bonds yield 6.50%. The real risk-free rate is r* = 0.5%, the default risk premium for Zoom's bonds is DRP = 0.40%, the liquidity premium on Zoom's bonds is LP = 2.2% versus zero on T-bonds, and the inflation premium (IP) is 1.5%. What is the maturity risk premium (MRP) on all 6-year bonds?
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Healthcare Finance An Introduction To Accounting And Financial Management
Authors: Louis Gapenski
1st Edition
1567930905, 978-1567930900
