Question: Kenny Enterprises has just issued a bond with a par value of $1000, twenty years to maturity, and an 8% coupon rate with semiannual payments.

Kenny Enterprises has just issued a bond with a par value of $1000, twenty years to maturity, and an 8% coupon rate with semiannual payments. What is the cost of debt for Kenny Enterprises if the bond sells at the following prices? What do you notice about the price and the cost of debt?
a. $ 920
b. $ 1,000
c. $ 1,080
d. $ 1,173

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a If the bond sells for 920 we have 920 1000 1 YTM2 40 40 1 11 YTM2 40 YTM2 And solving via a calcul... View full answer

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