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a firm recently issued two types of bonds. THe first issue consisted of 2 0 - year stratight debt with an 8 % coupon paid

a firm recently issued two types of bonds. THe first issue consisted of 20-year stratight debt with an 8% coupon paid annually. The second issue consisted of 20-year bonds with a 6% coupon paid annually and attached warrants, where the value of warrants is $196.36. Both issues sold at their $1000 par values. Assume a tax rate of 20%. THe after-tax yield of the first issue is: 8%*(1-20%). What is the after-tax yield of the second issue?

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