Question: A $1,000 par value bond issued by Conseco Electronics has 16 years to maturity. The bond pays $78 a year in interest and is selling

A $1,000 par value bond issued by Conseco Electronics has 16 years to maturity. The bond pays $78 a year in interest and is selling for $880. What is the approximate yield to maturity?

b. If the firm is in a 30% tax bracket, what is the tax cost of the debt?

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Answer a The yield to maturity for this bond is 905 iThe formula for calculating a bonds ... View full answer

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