1. The 10-year bonds of Anna Corp. are yielding 1.5% per year more than T-Bonds with the same maturity. The real risk-free rate is 5%. The average inflation premium is 3%. The maturity risk premium (MRP) is equal to 0.1(t-1)%, where t = number of years to maturity. If the liquidity premium for corporate bonds is 0.5%, what is the default risk premium on the corporate bond?

Answer rating: 100% (QA)

Answer 7 Default paid by the deducing Now 2 your 11 ... View the full answer