Suppose the real rate is 1%, the risk-free rate is 4%, maturity risk premium is 2%, inflation premium is 3%, the default risk on similar debt is 3%, and the liquidity premium is 2%. What is the nominal interest rate on this venture’s debt capital? A. 11% B. 12% C. 13% D. 14% E. 15% the answer is 11% could u please show working to how they go the answer
Suppose the real rate is 1%, the risk-free rate is 4%, maturity risk premium is 2%, inflation premium is 3%, the default risk on similar debt is 3%, and the liquidity premium is 2%. What is the nominal interest rate on this venture’s debt capital? A. 11% B. 12% C. 13% D. 14% E. 15% the answer is 11% could u please show working to how they go the answer
Chapter12: The Cost Of Capital
Section: Chapter Questions
Problem 10QTD
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Suppose the real rate is 1%, the risk-free rate is 4%, maturity risk premium is 2%, inflation premium is 3%, the default risk on similar debt is 3%, and the liquidity premium is 2%. What is the nominal interest rate on this venture’s debt capital? A. 11% B. 12% C. 13% D. 14% E. 15% the answer is 11% could u please show working to how they go the answer
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