What is current ytm of bonds and after-tax cost of debt

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You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 8.25 percent semiannual coupon bonds are selling at a price of $1,100.36. If these bonds are the only debt outstanding for the firm. The current YTM of the bonds is 7%. The after-tax cost of debt for this firm if it has a marginal tax rate of 34 percent is 4.62%.

What is the current YTM of the bonds and after-tax cost of debt for this firm if the bonds are selling at par?

Reference no: EM131354995

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