The existing 10 year, 6% bonds are trading in the market at $900. The corporate...
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The existing 10 year, 6% bonds are trading in the market at $900. The corporate tax rate is 32% Estimated YTM formula: YTM= Coupon + par value-market value years market value + par value 2 After-tax interest rate=YTM (1-T) 2a. Calculate the interest rate for the new bonds. 2b. What is the after-tax interest rate for the new bonds? OVER
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