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ilde Check my work mode: This shows what is correct or incorrect for the work you have completed so tal. It does not W completion.
ilde Check my work mode: This shows what is correct or incorrect for the work you have completed so tal. It does not W completion. Return to question 13 Airbome Airlines Inc. has a $1,000 par value bond outstanding with 20 years to maturity. The bond carries an annual interest payment of S102 and is currently selling for $880. Airborne is in a 30 percent tax bracket. The fim wishes to know what the aftertax cost of a new bond issue is likely to be. The yield to maturity on the new issue will be the same as the yield to maturity on the old issue because the risk and maturity date will be similar points a. Compute the yield to maturity on the old issue and use this as the yield for the new issue. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Yield on new issue 11.64 % b. Make the appropriate tax adjustment to determine the aftertax cost of debt. (Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Altertax cost of debt 8.15 %
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