Calculate the post tax (25%) yield to maturity of the following bond: - Market price 65.75 -
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Question:
Calculate the post tax (25%) yield to maturity of the following bond:
- Market price 65.75
- Par 100
- Coupon 9%
- Redemption at par 10 years
If this is redeemed at market price then what would the cost of debt be?
2. A bank loan is 9% interest. What is the cost of debt to the company?
3. What is the cost of debt of an irredeemable bond that has a coupon of 4%, a par value of 100 and a market price of 110?
4. Complete the following:
As interest rates increase, bond prices __________. As interest rates decrease, bond prices ________________
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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