Question
Magic and More Inc. has the following two bonds outstanding. Bond A Bond B Face Value...
Magic and More Inc. has the following two bonds
outstanding.
Bond A Bond B
Face Value 1,000 1000
Current Price 110 95
Years to Maturity 10 8
Compounding annually semiannually
Coupon rate 7% 9%
# of bonds outstanding 8000 2000
What is the yield to maturity on Bond A? ___________
What is the yield to maturity on Bond B? ___________
What is the percentage weight for Bond A? ___________
What is the percentage weight for Bond B? ___________
What is the weighted average cost of debt? ___________
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