DIQDODOM (9 of 10) XYZ bonds sell for $900. They have a $1,000 par value, 8%...

Question

Question

Answer 1

Answer #1

Price of the bond(PV) = 900

Par value (FV) = 1000

Semi annual coupons (PMT) = 1/2 * 8% * 1000 = 40

Years to maturity(nper) = 8 *2 = 16 periods

Pre-taxCost of debt(YTM) = = 4.92% semi annual = 9.83% pa

Answer 2

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