A particular securityrsquos default risk premium is 3, Ask an Expert

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A particular security’s default risk premium is 3 percent. For all securities, the inflation risk premium is 2.65 percent and the real risk-free rate is 5.30 percent. The security’s liquidity risk premium is 0.35 percent and maturity risk premium is 0.95 percent. The security has no special covenants. Calculate the security’s equilibrium rate of return. (Round your answer to 2 decimal places.)

Rate of return = %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92711494

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