What rate of interest should the us corporate pay, Finance Basics

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What rate of interest should the us corporate pay

You are considering an investment in a AAA-rated U.S. corporate bond but you are not sure what rate of interest it should pay. Assume that the real risk-free rate of interest is 1.0%; inflation is expected to be 1.5%; the maturity risk premium is 2.5%; and, the default risk premium for AAA rated corporate bond is 3.5%. What rate of interest should the U.S. corporate pay?

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Finance Basics: What rate of interest should the us corporate pay

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Recent Questions Asked Finance Basics

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: What rate of interest should the us corporate pay

Reference No:- TGS0517413

Recent Questions Asked Finance Basics

Q : Project for the entertainment industry

Q : Determine the amount of dividends paid

Q : The forward discount of the mexican peso

Q : Should higher education be classified as natural monopoly

Q : What rate of interest should the us corporate pay

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Q : Directing and managing project execution

Q : Analyzing an income statement

Q : Techniques better that others or do all work equally well

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