paigedice8090
14.05.2021 •
Business
Nathan Akpan is planning to invest in a seven-year bond that pays annual coupons at a rate of 7 percent. It is currently selling at $927.23. What is the current market yield on this bond
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Ответ:
Cost of debt= 8.34%
Explanation:
The yield to maturity to Maturity can be used to work out the cost of debt using the formula below:
YM =( C + F-P/n) ÷ ( 1/2× (F+P))
C- annual coupon,
F- face value ,
P- current price,
n- number of years to maturity
YM - Yield to maturity
C- 7%× 1000 =70 , P= 927.23, F- 1000
AYM = 70 + (1000-927.23)/7÷ 1/2× (1000+927.23)
= 80.39571429 ÷ 963.615
= Yield to maturity = 8.34%
Cost of debt= 8.34%
Ответ:
I believe it’s d the right answer