MBA 520 Module Eight Cost of Capital Worksheet - 96259

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Solution-1

12% bond with 15 years to maturity is currently selling for $1,153.72.  Thus, its yield to maturity is 10%:

                 0                1                2                3                                 29              30

                  |                 |                 |                 |              · · ·              |                 |

           -1,153.72        60              60              60                                60              60

                           &