Calculate the Inflation Premium (IP) on 5-year bonds Let’s

Calculate the Inflation Premium (IP) on 5-year bonds Let’s

Calculate the Inflation Premium (IP) on 5-year bondsLet’s say a company has 5-year bonds yield of 6.85%, and 5-year T-bonds yield 4.75%. The real risk-free rate is r* = 2.80%, the default risk premium for the company’s bonds is DRP = 0.85% versus zero for T-bonds, the liquidity premium on the company’s bonds is LP = 1.25%, and the maturity risk premium for all bonds is found with the formula MRP = (t – 1)x 0.1%, where t = number of years to maturity. What is the inflation premium (IP) on 5-year bonds?

"You need a similar assignment done from scratch? Our qualified writers will help you with a guaranteed AI-free & plagiarism-free A+ quality paper, Confidentiality, Timely delivery & Livechat/phone Support.


Discount Code: CIPD30



Click ORDER NOW..

order custom paper