How to Calculate Default Risk Premium?
Default Risk Premium calculator uses Default Risk Premium = Interest Rate-Risk Free Rate to calculate the Default Risk Premium, The Default Risk Premium (DRP) measures the incremental return that investors require as compensation for undertaking the risk of holding a risky security, such as a corporate bond. Default Risk Premium is denoted by DRP symbol.
How to calculate Default Risk Premium using this online calculator? To use this online calculator for Default Risk Premium, enter Interest Rate (R_{i}) & Risk Free Rate (R_{f}) and hit the calculate button. Here is how the Default Risk Premium calculation can be explained with given input values -> 5.7 = 6-0.3.