Question
Your firm has three bond issues outstanding. The first consists of 7,000 bonds denominated in Australian Dollars, which have a face value of 1,000AUD that
Your firm has three bond issues outstanding. The first consists of 7,000 bonds denominated in Australian Dollars, which have a face value of 1,000AUD that pay 4.70% annual coupons and mature in 6 years. These are selling at 1,030AUD, which implies a yield-to-maturity of 4.13%.
The second issue consists of 12,000 instruments denominated in US Dollars, with a $1,000 face value that pay 4.90% annual coupons and mature in 13 years. These bonds are selling for $1,010, which implies a yield-to-maturity of 4.80%.
The third issue consists of 21,000 bonds denominated in US Dollars, with a face value of $1,000 that pay 4.15% annual coupons and mature in 24 years. These bonds are selling at 86% of par value.
The firm's marginal tax rate is 17%. The current foreign exchange rates between major international currencies are provided below.
(Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 3.16.)
What is the yield-to-maturity of the third bond issue?%
What is the USD-denominated after-tax weighted-average yield-to-maturity on the firm's three outstanding bond issues?%
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