Solved by a verified expert :irbome Airines inc. has a $1,000 par value bond outstanding with 20 years to maturity The bond cames an annual nderest payment of S06 and is curently seling for $000 Arome s n a 36 pencent ta bracket. The firm wishes to know what the aftertax cost of a new bond issue s skely to be. The yield to maturity on the new issue wil be the same as the yiekd to maturity on the old issue becane the ra and maturity date will be similar a. Compute the yield to maturity on the okd issue and use this as the yiekd for the new issue. (Do not round intermediate caiculations, input your answer as a percent rounded to 2 decimal places.) b. Make the appropriate tax adjustment to determine the afertax cost of debt (Do not round intermediate caiculations Input your answer as a percent
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