David Abbot is interested in purchasing a bond issued by Sony He has obtained the following information on the security Sony Bond Par value $1000 Coupon interest rate 5 5 Corporate tax rate 25 Cost $930 Years to maturity 10 Answer the following questions a Calculate the before tax cost of the Sony bond using the bond's yield to maturity (YTM) b Calculate the after tax cost of the Sony bond given the corporate tax rate

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David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security: Sony Bond Par value $1000

David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:

Sony Bond
Par value $1000	Coupon interest rate 5.5%	Corporate tax rate 25%
Cost $930	Years to maturity 10

Answer the following questions:

a.Calculate the before-tax cost of the Sony bond using the bond's yield to maturity (YTM). %

b.Calculate the after-tax cost of the Sony bond given the corporate tax rate. %

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