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The Wall Street Journal reports that the current rate on 7-year Treasury bonds is 6.00 percent, the rate on 14-year Treasury bonds is 6.40 percent, and the rate on a 14-year corporate bond issued by MHM Corp. is 7.65 percent. Assume that the maturity risk premium is zero. If the default risk premium and liquidity risk premium on an 7-year corporate bond issued by MHM Corp. are the same as those on the 14-year corporate bond, calculate the current rate on MHM Corp.'s 7-year corporate bond. (Round your answer to 2 decimal places.) Current rate %

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Category:- Financial Management
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