What is yield to maturity on firms bonds

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Reference no: EM13944593

The bonds for Alpha Corp are $1,000 face value with a 5% coupon rate, paid semiannually, and currently trade at $985. The bonds will mature in 8 years. The firm is in 40% tax bracket. You have estimated the market risk premium to be 6% and yield on 10 year U.S. treasuries is 4%. What is the yield to maturity on the firm’s bonds?

Reference no: EM13944593

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