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In December of 2005, the Eastman Kodak Corporation (EK) had astraight bond issue outstanding that was due in eight years. Thebonds are selling for 108.126%, per bond and pay a semiannualinterest payment based on 7.25% (annual) coupon rate of interest.Assume that the bonds remain outstanding until maturity and thatthe company makes all promised interest and principal payments in atimeley basis. What is the YTM to maturity to the bondholders inDecember of 2005?

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