Why does the yield to maturity of a firms debt generally overestimate its debt cost of capital?

Question:

Why does the yield to maturity of a firm’s debt generally overestimate its debt cost of capital?

AppendixLO1

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Corporate Finance The Core

ISBN: 9781292431611

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

Question Posted: