Hi there.
firstly, just want to say thanks so much for these excellent videos.
Just a quick question about irredeemable debt, the higher the market value/price of the loan the lower the cost of debt, surely the cost of debt would be higher if we have a higher market value note ie I/P =kd, so 7.5/120 =6.25%, if the note value was 160, then the cost of debt would be 7.5/160 = 4.69%. wouldn't the cost of debt be higher and not lower.
Thanks so much
S
superashy·
The answers are wrong in Q6 & Q8 in the 2019 syllabus lecture notes.
P
P2-D2Tutor·
Thanks for kindly highlighting this. I'll update the notes for the 2021 version of the notes.
firstly, just want to say thanks so much for these excellent videos.
Just a quick question about irredeemable debt, the higher the market value/price of the loan the lower the cost of debt, surely the cost of debt would be higher if we have a higher market value note ie I/P =kd, so 7.5/120 =6.25%, if the note value was 160, then the cost of debt would be 7.5/160 = 4.69%. wouldn't the cost of debt be higher and not lower.
Thanks so much