Question
IBM issued a 30-year $1,000 par value bond with 8% coupon rate 10 years ago. The coupons are paid semiannually. The bond is currently selling
IBM issued a 30-year $1,000 par value bond with 8% coupon rate 10 years ago. The coupons are paid semiannually. The bond is currently selling at 96% of its par value. What is the YTM on IBM's debt (cost of debt)?
2) IBM issued a 30-year $1,000 par value bond with 8% coupon rate 15 years ago. The coupons are paid semiannually. The bond is currently selling at 104% of its par value. What is the YTM on IBM's debt (cost of debt)?
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Answer To calculate the yield to maturity YTM for each bond we can use the foll...
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
