Question
Scranton Paper Inc. has semi-annual bonds with 15 years to maturity. These bonds have a 9% coupon rate with a PV of $1,000. If the
Scranton Paper Inc. has semi-annual bonds with 15 years to maturity. These bonds have a 9% coupon rate with a PV of $1,000. If the bonds currently sell for $1,100, what is their yield-to-maturity? Further, with a tax rate of 25%, what is the after-tax cost of debt for the firm?
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The New CFO Financial Leadership Manual
Authors: Steven M. Bragg
3rd Edition
0470882565, 978-0470882566
