True or False. The cost to maturity that a firm pays on its existing bonds equals...

Question

Question

True or False.

The cost to maturity that a firm pays on its existing bonds equals the rate of return required by the market.

Answer 1

Answer #1

True

Cost to Maturity is the yield to maturity on the bond and it is equal to the rate that market expects, by adjusting the bond price.

Answer 2

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