Determine the value that vaughn should offer

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Vaughn Corporation would like to float a 30-year bond and would like to know the yield it should offer.

The corporation believes that a 0.8 percent default risk premium, a 0.3 percent liquidity premium, and a 0.7 percent tax adjustment are necessary to sell debt in the markets.

Furthermore, Treasury bond rates are currently 4 percent. Based on this information, Vaughn should offer ____ percent on this debt issue.

Reference no: EM132048575

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