464 divide by 16 is 29. So y would be 29
Answer:
$3.94
Step-by-step explanation:
You will need to use the compound interest formula for this.
P = initial balance
r = interest rate
n = number of times compounded annually
t = time
Your equation will look like this:
= 3.94
R. It is not in the same plane as C, D and E
Based on the required rate of return, the real risk free rate, and the inflation premium, the default risk premium on the corporate bonds is 1.2%
<h3>How is the default risk premium found?</h3>
The default risk premium can be found as:
=real risk free rate + Inflation premium + default risk premium + liquidity premium + maturity risk premium
Solving gives:
= 0.07 - 0.0275 - 0.0205 - (0.1 x (t - 1)%)
= 0.07 - 0.0275 - 0.0205 - (0.1 x (5 years - 1)%)
= 1.2%
The default risk premium refers to the return that the bond is offering over what a risk-free bond would offer.
This means that the corporate bond described is offering 1.2% more than what a risk-free government bond would offer.
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