16) KeySpan Corp. is planning to issue debt that will mature in 2035. In many respects, the...
Question:
16)
KeySpan Corp. is planning to issue debt that will mature in 2035. In many respects, the issue is similar to the currently outstanding debt of the corporation. UseTable 11-3. |
a. | Calculatethe yield to maturity on similarly outstanding debt for the firm, in terms of maturity.(Input your answer as a percent rounded to 2 decimal places.) |
Yield | % |
Assume that because the new debt wil be issued at par, the required yield to maturity will be .15 percent higher than the value determined in part a. |
b. | What is the new yield to maturity?(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) |
Yield | % |
c. | If the firm is in a 30 percent tax bracket, what is the aftertax cost of debt for the yield determined in partb?(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) |
Aftertax cost of debt | % |