You are analyzing the after-tax cost of debt for a firm. You know that the firm\

Question

You are analyzing the after-tax cost of debt for a firm. You know that the firm's 12-year maturity, 9.65 percent semi-annual coupon bonds are selling at a price of $767.53 These bonds are the only debt outstanding for the firm. a. 3 Your answer is incorrect. Try again. What is the current YTM of the bonds? (Round intermediate calculations to 4 decimal places, e.g 1.2514 and final answer to 2 decimat places e.g 15.25) places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 1S.25%.) by Click if you would like to Show Work for this question: Open Show work

Explanation / Answer

YTM = rate(nper,pmt,pv,fv)*2

nper(No of semi annual period Left to Maturity) = 12*2 = 24

pmt ( semi annual coupon) = 9.65%*1/2 * 1000 = $ 48.25

PV ( Current Selling price) = 767.53

FV ( Maturity value) = 1000

YTM = rate(24,48.25,-767.53,1000)*2

YTM = 13.64%

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