Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Find the cost of debt using the yield to maturity of bond Callable bonds with a coupon interest rate of 5% at a par value
Find the cost of debt using the yield to maturity of bond
Callable bonds with a coupon interest rate of 5% at a par value of 1,000 per bond and a term of 30 years. The 250,000 issue bonds would pay interest semi-annually, tax rate at 34%, the after-tax interest rate on the issue would be 3.3%. The would have a market price of 103 as a percentage of par.
I use RATE function to find yield to maturity without using after-tax interest on issue. I think it's wrong. Please help me, it will be good if you capture excel showing calculation.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started