Calculate the bond yield to maturity

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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?

Reference no: EM132764675

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