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Business, 03.07.2019 12:30 chafinh1811

Acompany's 5-year bonds are yielding 7.75% per year. treasury bonds with the same maturity are yielding 5.2% per year, and the real risk-free rate (r*) is 2.3%. the average inflation premium is 2.5%; and the maturity risk premium is estimated to be 0.1 × (t − 1)%, where . if the liquidity premium is 1%, what is the default risk premium on the corporate bonds?

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