The Habender Company just issued a two-year bond at 12%. Inflation is expected to be 4% next year and 6% the year after. Habender estimates its...

The Habender Company just issued a two-year bond at 12%. Inflation is expected to be 4% next year and 6% the year after. Habender estimates its default risk premium at about 1.5% and its maturity risk premium at about 0.5%. Because it's a relatively small and unknown firm, its liquidity risk premium is about 1.8% even on relatively short debt like this. What pure interest rate is implied by these assumptions? Round your answer to one decimal place.

NI = RIIPDP (Default risk premium)LP ( Liquidity risk premium)RP (Maturity risk premium) = NI = NI = RI = 12% - 5% - 1.5% - 1.8% - 0.5% RI = 3.20% = RI + IP + DP + LP + RP?(4%+6%) / 2 =...