Hi all, There is some error in it. Q stem says financed by 40% debt and calculated as 50% debt. Ok, how do you calculate interest expense on debt. Do you use coupon rate or YTM of the bond? And why? Thanks S
error on mock. its ytm to calc current interest rate on bonds not coupon rate.
Thanks Why? YTM is for WACC, the actual cash outflow - is it not coupon?
Actual interest expense is coupon
NO Interest expense is not the same as coupon interest or coupon payment
Aliman, So what should go for interest expense, can you please explain. S