Calculate the bonds default risk premium

Reference no: EM13258454

Dakota Corporation 15-year bonds have an equilibrium rate of return of 9 percent. For all securities, the inflation risk premium is 1.60 percent and the real interest rate is 3.20 percent. The security's liquidity risk premium is 0.70 percent and maturity risk premium is 1.30 percent. The security has no special covenants. Calculate the bond's default risk premium.

Reference no: EM13258454

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