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Author Question: Keys Corporations 7-year bonds yield 8%, and 7-year T-bonds yield 6.2%. The real risk-free rate is ... (Read 84 times)

swande

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on: Aug 7, 2023
Keys Corporation’s 7-year bonds yield 8%, and 7-year T-bonds yield 6.2%. The real risk-free rate is r* = 3.6%, the inflation premium for 7-year bonds is IP = 2%, the liquidity premium for Keys’s bonds is LP = 0.9% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1)×0.1%, where t = number of years to maturity. What is the default risk premium (DRP) on Keys’s bonds?

◦

0.5%


◦

0.8%


◦

0.9%


◦

1.1%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by swande on Aug 7, 2023

ladan86

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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swande

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

marict

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Reply 3 on: Yesterday
Excellent

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