Dear Sir,
If a company's NCL consist entirely of say for example 140m 6% Bonds and the company's cost of debt is also 6% , then is it fair to say that the market value of its debt is equal to its nominal value?
(I got this question from reading the answer in BBS Stores June 2009, page 19, where it said that the nominal value of debt is the same with the market value because it's the same under fixed & variable rate)
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Cost of Debt & Coupon Rate
9y ago#1The market value will be equal to the nominal value only if the redemption is at par (nominal value) or if the debt is irredeemable.
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