QUESTION 4 One way to solve for the cost of debt is to use the yield to maturity on current bonds. This represents investor's view of the cost of debt for the firm. Remember we can calculate the yield to maturity using the financial calculator: FV= 1000 (the face value) PMT= 60 (coupon rate as a decimla * the face value) PV= 1144.75 (the current market price of the bond - what its worth) Compute I/Y N= 10 (remember we multiple by 2 for semi-annual bonds) Let's practice calculating the yield to maturity: Suppose a 10-year, $1000 bond with an 6.0% coupon rate and annual coupons is trading for $1144.75. What is the bond's yield to maturity? 4.20% 7.05% 6.00% 5.52% 6.90%