Elm plc issued 100m of bonds six years ago carrying an annual coupon rate of 8 percent.
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Question:
"Elm plc issued 100m of bonds six years ago carrying an annual coupon rate of 8 percent. They are due to be redeemed in four years for the nominal value of 100 each. The next coupon is payable in one year and the current market price of a bond is 93. What is the cost of debt?"
How do I achieve this without financial calculator or excel? My lecturer taught using the interpolation method but I don't understand how she derived the numbers. Please help!
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