Niendorf Corporation's 5-year bonds 8.00%, and 5 -year T-Bonds yeild 4.80%. The real risk-free rate is r*=2.75%, the inflation premium for 5-year bonds is IP=1.65%, the default risk prmium for Niendorf's bonds is DRP=1.20% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP=(t-1) x 0.1% where t= number of years to maturity. What is the liquidy premium (lp) on Niendorf's bonds?
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