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What is the current market risk premium implied by the following information about AT&T Company’s bonds, assuming that the market for the bonds is in equilibrium?

Par value: $1,000

Years to maturity: 20 years

Coupon rate: 8% paid semiannually

Current market price: $955

Current risk-free rate: 7%

Beta of the bond: 0.2

Select one:

a. 8.12%

b. 6.34%

c. 8.56%

d. 7.35%

e. 7.00%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92430748

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