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Russell Container Corporation has $1.000 par value bond outstanding with 20 years to maturity. The bond comes in an interest payment of $123 and is
Russell Container Corporation has $1.000 par value bond outstanding with 20 years to maturity. The bond comes in an interest payment of $123 and is currently selling for $850 per bond Russel Corp. is in a 25 percent tax bracket The firm wishes to know what the shertax 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 4. Compute the yield to maturity on the old issue and use this as the yield for the new issue. Do not round intermediate calculation. Input your answers o percent rounded to 2 decimal places. Vald on new b. Make the appropriate tax adjustment to determine the aftertax cost of Dentround intermediate atten. Inut your answer os percent rounded to 2 decimal slaces
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