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An eBay bond has 25 years until maturity and the coupon rate is 4.0%. The quoted price of the bond is 77.334 and the yield to maturity is 5.667%. The yield to maturity on a U.S. Treasury bond with 26 years until maturity is 2.696%. Assuming a liquidity risk premium of zero, what is the default risk premium on the eBay bond?

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Collen Von
Collen VonLv2
28 Sep 2019

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