Appropriate total rate of return suitable

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You are considering investing in Blackmores, a pharmaceutical company's long-term debt. You require a credit risk premium of 3.5%, and a maturity risk premium of 1.5%. The long-term inflation rate is 2%, the risk-free rate of return is 3% and Blackmores' shareholders require a 2% premium above what creditors earn. Given such information, what would be an appropriate total rate of return suitable for Blackmores' long-term debt?

Reference no: EM132998648

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