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Consider two bonds with the same maturity dates (10 years away) and the same coupon payment ($35.75 paid every six months). One of the bonds is a Treasury bond with a yield to maturity of 4.95%. The other bond is a Corporate Bond that has a default risk premium of 1.15% and a liquidity premium of 0.33%. Determine the price of the Corporate Bond.

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Financial Management, Finance

Category:- Financial Management
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