Illustration

kps = 9% kd = 10% T = 40%

kps, AT = kps - kps (1 - 0.7)(T)

= 9% - 9%(0.3)(0.4) = 7.92%

kd, AT = 10% - 10%(0.4) = 6.00%

A-T risk prem. on pfd. = 1.92%.

Previous slide

Next slide

Back to first slide

View graphic version