A Treasury bond that matures in 9 years has a yield of 8.00%. A 9-year corporate bond

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A Treasury bond that matures in 9 years has a yield of 8.00%. A 9-year corporate bond has a yield of 8.25%. Assume that the liquidity premium on the corporate bond is 0.40%. What is the default risk premium on the corporate bond?

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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt, Eugene F. Brigham

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Posted Date: May 02, 2024 12:23 AM

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A Treasury bond that matures in 9 years has a yield of 8.00%. A 9-year corporate bond

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The default risk premium on a corporate bond represents the additional yield or return investors req... View the full answer

Corporate Finance A Focused Approach

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