reading 35 - part practice question 22
Hi, I am having some issues calculating the cost of debt for the below :
Currently outstanding bonds $2.4 million five-year bonds, coupon of 12.5 percent, with a market value of $2.156 million
The solution presented in the curriculum is as follows :
For debt: FV = 2,400,000; PV = 2,156,000; n = 10; PMT = 150,000
Solve for i. i = 0.07748. YTM = 15.5%
However , I am not getting the 0.07748 but a negative rate.
please help :)
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.