Question: a . A 2 0 year old callable bond can be called back at year 1 5 . At the time of issuance, the bond

a. A 20 year old callable bond can be called back at year 15. At the time of issuance, the bond was sold for RM875, and the callable value is RM1,100.The annual coupon rate is 6%.
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Bond 5
b. A 20-year bond was issued 5 years ago for RM900, and coupon rate is 5% annually. The current market price of the bond is RM850.
1.Determine cost of debt at the time of issuance.
2. Determine the current cost of debt.
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