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Business, 06.10.2019 07:30 vnzgirl

On-the-bubble corporation, a us company, plans to issue $100,000,000 in par value of new 10-year maturity, 0% coupon rate, senior, unsecured bonds. the issue would be priced at 68-00 (68% of par value) and the $68,000,000 proceeds from this issue will be exactly enough money to fund an exciting new project. what would be the yield on this 0% coupon rate debt to investors (and, therefore, the cost of debt to on-the-bubble corporation) if it were to be issued at this 68-00 price? this is a us company: express your yield answer in the appropriate compounding convention.

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