If amelia hardhearted were to issue a new bond with the


Amelia Hardhearted Advertisers has a $1,000 par value bond outstanding with 20 years to maturity. The bond carries an interest payment of $90 annually and is currently selling for $925. The corporation has 25% marginal tax rate. (1) Compute the yield to maturity (y')-see p. 513 . (2) If Amelia Hardhearted were to issue a new bond with the same characteristics as the old bond, what is the after-tax yield to maturity likely to be?

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Basic Computer Science: If amelia hardhearted were to issue a new bond with the
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