Question
Henry’s Driving School has two bonds outstanding. Following are the details for each bond. Bond A &
- Henry’s Driving School has two bonds outstanding. Following are the details for each bond.
Bond A Bond B
# of bonds outstanding 2,000 4,000
Face Value $1,000 $1,000
Current Price 103 93
Coupon Rate 6% 7%
Payable Semiannually Annually
Years to Maturity 15 11
What is the yield to maturity on Bond A? _________________
What is the yield to maturity on Bond B? _________________
What is the market value weight (percentage) of Bond A? ________________
What is the market value weight (percentage) of Bond B? ________________
What is the weighted average cost of debt for Henry’s? ________________
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