Yield on a 7-Year Bond
Not what you're looking for?
DC Corporation's 4-year bonds currently yield 7.4 percent. The real risk-free rate of interest, r* is 2.7% and is assumed to be constant. The MRP is estamited to be 0.1%(t-1), where t is equal to the time to maturity. The default risk and liquidity premiuns total 0.9% If the average inflation rate is expected to be 5% for years 5,6, and 7, what is the yield on a 7 year bond for DC?
Purchase this Solution
Solution Summary
Brief calculations show how to find a corporation's yield on a bond with 7.4 percent.
Solution Preview
what is the yield on a 7 year bond for DC=
Real risk free rate + MRP+ Default risk + Liquidity premiums + Average Inflation ...
Purchase this Solution
Free BrainMass Quizzes
Learning Lean
This quiz will help you understand the basic concepts of Lean.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Introduction to Finance
This quiz test introductory finance topics.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media