Theo has been assigned the task of determining the cost of capital for his division of the firm.His first step is to determine the cost of debt.The firm has $1,000 par value bonds outstanding that have an annual coupon rate of 8.00% and make semiannual payments.These bonds have twenty-three years remaining to maturity and currently sell for $1,133.42.What is the yield-to-maturity on these bonds? Use a financial calculator to determine your answer.
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