Business & Finance Assignment | Custom Assignment Help
November 15th, 2019
What is the current market risk premium implied by the following information about EEM Company’s bonds, assuming that the market for the bonds is in equilibrium?
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- Par value: $1,000
- Years to maturity: 20 years
- Coupon rate: 8% paid semiannually
- Current market price: $980
- Current risk-free rate: 5%
- Beta of the bond: 0.5
Select one:
a. 6.41%
b. 6.00%
c. 8.12%
d. 7.50%
e. 8.56%