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Company B had issued 10-year bonds a year ago at the coupon rate 6%. The bond makes annual payments. The yield to maturity (YTM) of

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Company B had issued 10-year bonds a year ago at the coupon rate 6%. The bond makes annual payments. The yield to maturity (YTM) of these bonds is 5%. The face value of the bond is $1000. Calculate the current bond price. OTBET: Company B has a second debt issue on the market, a zero coupon bond with 6,3 years left to maturity. The yield to maturity (YTM) of these bonds is 8 %. The face value of the bond is $1000. Calculate the current bond price. OTBET: Refer back to previous two questions. If the market value of the 10-year bonds is $ 15 million and the market value of the zero coupon bond is $ 49 million (these are the two bond issues outstanding for the company B) what is the after tax cost of debt of company B? The tax rate is 30%. Express your answer as %

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