Compute yield to maturity and make the appropriate tax, Financial Management

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Compute yield to maturity and make the appropriate tax

A company has a $1000 par value bond outstanding with 20 years to maturity. The bond carries an annual interest payment of $95, and is currently selling for $945 per bond. The company is in 35% tax bracket. Compute yield to maturity and make the appropriate tax adjustment to determine the after-tax cost of the debt.

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Financial Management: Compute yield to maturity and make the appropriate tax

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