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You are analyzing the cost of debt for a firm. You know that the firm’s 14-year maturity, 9.75 percent coupon bonds are selling at a price of $885.92. The bonds pay interest semiannually. If these bonds are the only debt outstanding for the firm.

What is the current YTM of the bonds? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

The current YTM for the bonds %

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What is the after-tax cost of debt for this firm if it has a 30 percent marginal and average tax rate? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

After-tax cost of debt %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92741536

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