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  3. 10 a company s 10 year bonds are yielding 7 5 perc

10 A company s 10 year bonds are yielding 7 5 percent per year Treasury...

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10 A company s 10 year bonds are yielding 7 5 percent per year Treasury bonds with the same maturity are yielding 5 2 percent per year and the real risk free rate r is 2 1 percent The average inflation premium is 2 4 percent and the maturity risk premium is estimated to be 0 1 t 1 where t number of years to maturity If the liquidity premium is 0 2 percent what is the default risk premium on the corporate bonds

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