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New Jet Airlines plans to issue 15-year bonds with a par value of $1,000 that will pay $30 every six months. The bonds have a

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Answer #1

Calculating YTM on Bond,

Using TVM Calculation,

I = [PV = -1,040, FV= 1,000, PMT = 30, N = 30]

I = 5.60%

Cost of Debt = (1 - 0.35)(0.056)

Cost of Debt = 3.64%

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