Calculating the Promised YTM Evaluate the promised YTM for the bonds issued by Ford (F) and General Motors (GM). You may assume that interest is paid semiannually. Also, round the number of compounding periods to the nearest six months.

1. Calculate the annualized yield to maturity as the cost of debt.

2. Find the cost of debt for given credit rating, which can also use the cost of debt

		Ford	GM
	Coupon	6.375%	8.375%
	Maturity in years	24	28
	Ratings	BBB-	BBB
	Price	927.84	1061.25
a	solution with formula and excel	Ford	GM
	annual coupon	??	??
	years to maturity	??	??
	# of payments per year (m)	??	??
	# of payments till maturity	??	??
	amount for each payment	??	??
	Nper	??	??
	PMT	??	??
	PV	??	??
	FV	??	??
	Type	??	??
	Rate	??	??
	annual Yield to maturity (APR)	??	??
b	Solution with credit rating	Ford	GM
	risk free rate	??	??
	Credit rating	??	??
	Credit spread	??	??
	annual Yield to maturity (APR)	??	??
	Notes:
	The spread is quoted in basis points (bps).
	5bps ---> 5 /10000 = 0.0005 = 0.05%

y0-3305588800 0466788013628 0 4308 11112233453 208 566 9755005005 9139351365 11223342 0670059795055550 334567801691 705505 244578 05550000 15813888 111122231 y) 5 5 2 0 5 0 3 5 5 5 1123356790 1112 2 00750940050005005 11123356781689090 1111222 1, 5 8 0 5 20 30 40 50 55 70 00 20 45 70 95 45 05 050555 247940 111-121 11234557 y0-3305588800 0466788013628 0 4308 11112233453 208 566 9755005005 9139351365 11223342 0670059795055550 334567801691 705505 244578 05550000 15813888 111122231 y) 5 5 2 0 5 0 3 5 5 5 1123356790 1112 2 00750940050005005 11123356781689090 1111222 1, 5 8 0 5 20 30 40 50 55 70 00 20 45 70 95 45 05 050555 247940 111-121 11234557