Problema firm raises captial by selling 20000 worth of debt, Ask an Expert

Accounting

Problem:

A firm raises captial by selling $20,000 worth of debt with flotation costs equal to 2% of its par value.

Required:

Question: If the debt matures in 10 years and has a coupon interest rate of 8%, what is the bond's YTM?

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165415

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