A firm raises capital by selling $18,000 worth of debt with flotation costs equal to 3% of its par value. If the debt matures in 10 years and has an annual coupon interest rate of 10%, what is the bond's YTM? (Round to two decimal places.)
A firm raises capital by selling $18,000 worth of debt with flotation costs equal to 3% of its par value. If the debt matures in 10 years and has an annual coupon interest rate of 10%, what is the bond's YTM? (Round to two decimal places.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 2P
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A firm raises capital by selling $18,000 worth of debt with flotation costs equal to 3% of its par value. If the debt matures in 10 years and has an annual coupon interest rate of 10%, what is the bond's YTM? (Round to two decimal places.)
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