A treasury bond that matures in 10 years has a yield of 0.75%. A 10 year bond issued by Akira corporation has a yield of 11% and a liquidity premium of 3.00%. what is the default risk premium of the corporate bond?
Default risk premium = 10-year corporate bond yield - 10-year treasury bond yield - Liquidity premium
Default risk premium = 11% - 0.75% - 3.00%
Default risk premium = 7.25%
A treasury bond that matures in 10 years has a yield of 0.75%. A 10 year...
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