T-shirt plc issued 220,000 bonds. Nominal value of 100. Coupon rate of interest of 8% per annum.

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T-shirt plc issued 220,000 bonds. Nominal value of £100. Coupon rate of interest of 8% per annum.

The bonds have another five years to maturity and are trading at £116.

i. Calculate the bond yield to maturity?

ii. If corporation tax is 20%, what is the cost of debt after tax?

Related Book For answer-question

Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

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Posted Date: Jun 22, 2023 03:29 AM

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T-shirt plc issued 220,000 bonds. Nominal value of 100. Coupon rate of interest of 8% per annum.

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Expert Answer:

To calculate the bond yield to maturity we need to use the formula for yield to maturity Y... View the full answer

Financial Accounting an introduction to concepts, methods and uses

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