Calculate the nominal rate of a new bond issue start with, Financial Management

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Calculate the nominal rate of a new bond issue start with

Calculate the nominal rate of a new bond issue, using the following assumptions: • Start with the risk free rate • Apply an inflation risk premium • Apply a maturity risk premium • Apply a default risk premium • Assume there is no liquidity risk premium • To calculate the above rates/premiums, use the same assumptions on calculations as we used in class. • 30-day T-Bill rate 30-year T-Bond rate 30-year Aaa corporate bond rate Inflation rate 4.71% 5.17% 5.94% 3.10% Show all work.

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Financial Management: Calculate the nominal rate of a new bond issue start with

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Financial Management: Calculate the nominal rate of a new bond issue start with

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