Yield of Treasury bond = 4.50%
Yield of Corporate bond = 8.75%
Liquidity premium on corporate bond = 0.35%
Thus,
Default risk premium on Corporate bond would be:
Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
ment: Module 3 Homework as Problem 6.04 (Default Risk Premium) Save SEME Assement for Grading Check...
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