If I am correct I need to use yield spread between a TB which is 6% and a Corporate bond which is 8%. I believe the yield rate is 1.33 (8 /6) I know the correct answer is 1.50?? Does the liquity premium of .05 come into play?? I am 54 years old and have 2 classes to complete masters, I am trying not to freak. I hope someone can help me.
Thank You very much
Linda