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BigFella9503 BigFella9503
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A year ago
Keys Corporation’s 7-year bonds yield 8%, and 7-year T-bonds yield 6.2%. The real risk-free rate is r* = 3.6%, the inflation premium for 7-year bonds is IP = 2%, the liquidity premium for Keys’s bonds is LP = 0.9% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1)×0.1%, where t = number of years to maturity. What is the default risk premium (DRP) on Keys’s bonds?


▸

0.5%



▸

0.8%



▸

0.9%



▸

1.1%

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
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moyo966moyo966
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A year ago
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BigFella9503 Author
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A year ago
Smart ... Thanks!
TAT1238
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Yesterday
Thank you, thank you, thank you!
big_larry_samp
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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