Keyspan corp. is planning to issue debt that will mature in the year 2030. In ma
ID: 2694319 • Letter: K
Question
Keyspan corp. is planning to issue debt that will mature in the year 2030. In many respects the issue is similar to currently outstanding debt of the corporation. Using Table 11-2, identify: (a) The yield to maturity on similarly outstanding debt for the firm, in terms of maturity. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Yield % (b) Calculate yield to maturity with an increase of 0.15 percent than the value determined in part a. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Yield % (c) If the firm is in a 30 percent tax bracket, what is the aftertax cost of debt for yield determined in part b? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Cost of debt %Explanation / Answer
a. 5.80% ===================================================== b. 5.80% + .15% = 5.95% ========================================================================== c. Kd = Yield (1
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