Default risk premium on the corporate bond


Problem:

A Treasury bond that matures in 10 years has a yield of 5.25%. A 10-year corporate bond has a yield of 7.75%. Assume that the liquidity premium on the corporate bond is 0.35%.

Required:

Question: What is the default risk premium on the corporate bond?

Note: Show supporting computations in good form.

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Accounting Basics: Default risk premium on the corporate bond
Reference No:- TGS0886334

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