Consider HealthNorth Corporation. Its bonds are callable 30-year bonds with an inflation premium of 3%, default risk, liquidity and price risk premiums of 1 percent each, and a call risk premium of 30 basis points. Under these assumptions, what is the presumed interest rate of these bonds?
Interest rate30 year bonds = RRF+IP+DRP+LP+PRP+CRP
Interest rate30 year bonds = RRF+IP+DRP+LP+PRP+CRP ... View the full answer
- That was helpful, thank you!
- Jul 28, 2016 at 1:42am