[tanleeguan]

Hi Kelvin,

Thanks you very much.

Best Regards,
jamie

[tanleeguan]

Hi Kelvin,

Thanks for your advice.

Best Regards,

[tanleeguan]

Hi Kelvin,

Can I use short cut method to calculate the cost of debt?
Cost of debt for bond A =
a)i / Mvd = (9/95.08)X100 = 9.4657%
b)((PAR value – Mvd)/Mvd)X100) / yrs = ((100-95.08)/95.08
*100 / 10 yrs = 0.5174%

Krd for Bond A = (9.47 + 0.51) =9.98% (Exam answer is 9.83% )
Will my answer acceptable?

[Author]

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