Question
Cornerstone Industries has a bond outstanding that has an 8% coupon rate and a market price of $886.93. If the bond matures in 5 years
Cornerstone Industries has a bond outstanding that has an 8% coupon rate and a market price of $886.93. If the bond matures in 5 years and interest is paid semiannually, what is the YTM? If it is callable in 4 years with a 5% premium, what is the yield to call? If issuing new similar bonds carries a 5% floatation cost, what are the before and after tax cost of debt?
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The Investment Writing Handbook
Authors: Assaf Kedem
1st Edition
1119356725, 978-1119356721
