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Homework Answers
a) Yield to Maturity can be calculated using I/Y function on a calculator
N = 30, PMT = 126, PV = -880, FV = 1000
=> Compute I/Y = 14.35% is YTM
b) After-tax cost of debt = 14.35% x (1 - 40%) = 8.61%
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Please highlight the answers
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