A proposed debt agreement between SSC and its lender says that  the cafe is not allowed to pay any dividends to its equity holders until the interest is paid to the lender each year. The yield to maturity is 8% on this proposed agreement. The cafe would like to get rid of this clause. What would happen to the yield to maturity without this clause?

A. It will most likely be more than 8%

B. still 8%

C. It depends on the Marginal tax rate

D. lower than 8%

Answer rating: 100% (QA)

Interest is paid to lenders Shareholders are paid dividends Here th... View the full answer