What is default risk premium on the corporate bonds

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A company's 5-year bonds are yielding 9.55% per year. Treasury bonds with the same are 5.95% per year, and the real risk free rate (r*) is 2.15%. The average inflation premium is 3.4%, and the maturity risk premium is estimated to be 0.1 x (t - 1)%, where t - number of years to maturity. If the liquidity premium is 0.95%, what is the default risk premium on the corporate bonds'

Reference no: EM131456292

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