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. Use Table 11-3.

a. Calculate the 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 will be issued at par, the required yield to maturity will be 0.14 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 25 percent tax bracket, what is the aftertax cost of debt for the yield determined in part b? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Aftertax cost of debt

%

Maturity Date Nov-15-2030 Apr-01-2033 Apr-01-2035 Issue KeySpan Corporation KeySpan Corporat: KeySpan Corporation Security Type Corporate Debentures Corporate Debentures Corporate Debentures Seniority C oupon Offer Date Senior Unsecured 8.000 Nov-15-2000 Senior Unsecured 5.875 Apr-01-2003 Senior Unsecured5.803 Mar-29-2005 Amt.Outstdg. Current Current ($mm) Price YTM 250.00 131.285 4.710 150.00 117.973 4.250 3 07.20117.973 4.021 S&P Rating BBB+ BBB+ BBB+