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Calculate the before tax cost of bonds

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TradeUp Ltd current sources of capital include $1,000 par value bonds that pay a coupon rate of 13%. These bonds will mature in 8 years' time and the current market price for the bonds is $869. Using the approximate yield to maturity formula, calculate the before tax cost of bonds for TradeUp Ltd. Please answer to 3 decimal places. For example, 9.8% should be shown as 0.098.

Reference no: EM132506073

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