10-year Treasury Yield = r* + IP10
6.15% = r* + 3%
r* = 6.15% - 3% = 3.15%
5-year Treasury Yield = r* + IP5
3.65% = 3.15% + IP5
IP5 = 3.65% - 3.15% = 0.50%
10-year corporate bond = r* + IP10 + MRP + DRP + LP
9.9% = 3.15% + 3% + 0% + DRP + LP
9.9% = 6.15% + DRP + LP
DRP + LP = 9.9% - 6.15% = 3.75%
5-year corporate bond = r* + IP5 + MRP + DRP + LP
= 3.15% + 0.50% + 0% + 3.75% = 7.40%
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