Each of following bonds pay interests annually: Bond Par value Coupon interest rate Current value...
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Each of following bonds pay interests annually: Bond Par value Coupon interest rate Current value Years to maturity B A $1,000 9% 8 $ 820 1,000 12 16 1,000 500 12 12 560 a. Calculate the cost of the capital (Yield to Maturity) for each bond, please show your work with the calculator inputs or formula (Cost of long-term Debt). b. What relationship exists between the coupon interest rate and YTM, the Par value and the market value of a bond. Please explain the relationships in the above cases
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