Default risk premium, DEFAULT RISK PREMIUM

Default risk premium

Assignment Help Financial Management

Reference no: EM132072048

DEFAULT RISK PREMIUM

20-year T-bonds = 5.1% = rf + MP [+ IP + TP]

20-year corps = 9.1% = rf + MP [+ IP + TP] +LP + DP

LP on corps = 0.25%

corps - T-bonds = = LP + DP

LP on corps = 0.25%

DP =

Reference no: EM132072048

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