KeySpan Corp. is planning to issue debt that will mature in 2035. In many respects, the issue

Question:

KeySpan Corp. is planning to issue debt that will mature in 2035. In many respects, the issue is similar to the currently outstanding debt of the corporation.
a. Using Table 11-3, identify the yield to on similarly outstanding debt for the firm in terms of Assume that because the new debt will be issued at par, the required yield to will be 0.15 percent higher than the value determined in part a. Add this factor to the answer in a. (New issues sold at par sometimes require a slightly higher yield than older seasoned issues because there are fewer tax advantages and more financial leverage that increase company risk.)
c. If the firm is in a 30 percent tax bracket, what is the after tax cost of debt?
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...