Kd vs YTM

Hi John,

Please confirm whether my understanding is correct.

Thus, I’ve learnt that the following approaches are to be used for calculation of Kd and YTM (the sole difference is in tax relief):

(1) MV of bond reflects its value for a lender (NOT an issuer) and thus IRR should be based on discounted MV, redemption and coupon payments WITHOUT tax relief. This gives YTM aka GRY.

(2) If we have to calculate Kd, one should use IRR approach for MV, redemption and coupon payments WITH tax relief.

(3) At that, multiplying the IRR value from the option (1) which is YTM by (1-Tax) does not give us Kd and thus Kd might only be calculated by the option (2).

Thank you in advance.