Hi,
I’m doing an NPV analysis to evaluate the economics of a bond buyback. I’m not sure what discount rate to use, should it be the WACC, the cost of equity, the coupon/YTM of the new bond or anything else?
Thanks!
Hi,
I’m doing an NPV analysis to evaluate the economics of a bond buyback. I’m not sure what discount rate to use, should it be the WACC, the cost of equity, the coupon/YTM of the new bond or anything else?
Thanks!
Depends on the source of cash and whether the cash can be distributed elsewhere on a profitable project for your firm.