The securitys liquidity risk premium is 0.25 percent and, Ask an Expert

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Dakota Corporation 15-year bonds have an equilibrium rate of return of 8 percent. For all securities, the inflation risk premium is 1.75 percent and the real interest rate is 3.50 percent. The security's liquidity risk premium is 0.25 percent and maturity risk premium is 0.85 percent. The security has no special covenants. find out the bond's default risk premium. (Round your answer to 2 decimal places.)

Default Risk Premium ___________%

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