Default risk


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 =

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Financial Management: Default risk
Reference No:- TGS02865508

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