I’m doing the CFAI practice problems for 2012 Corporate Finance (Reading 37, question 12).

In solving the market value of debt, the question gives the following information, “… it also has $10 million face value bonds that have five years remaining to maturity and 8 percent coupon with semi-annual payments, and are priced to yield 13.65 percent.”

I don’t have my BA II Plus available to check this, but you might need to alter the variable for “periods per year.” However, I like to avoid that whenever possible.

The appropriate interest rate to use for N = 10 is the six-month rate, which is 13.65% / 2 = 6.825%. If you use that, you’ll get the correct PV.