Drongo corporations 4-year bonds yield 595 the real, Ask an Expert

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Drongo Corporation's 4-year bonds yield 5.95%. The real risk-free rate is 2.29%. The maturity risk premium is estimated to be 0.08%(t-1), where t is equal to the time to maturity. The default and liquidity premiums for Drongo's bonds total 0.66% and are believed to be the same for all bonds issued by the company. If the average inflation rate is expected to be 5.39% for years subsequent to 4 through year 10, what is the yield on a 10-year bond for Drongo?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91771958

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