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CFA Level 1
Corporate Finance

Cost of Debt Calculation for XYZ Corporation

Hard Cost Of Capital Cost Of Debt

XYZ Corporation is evaluating its cost of debt to determine the appropriate discount rate for new projects. The company has issued a bond that is currently trading at a price of $950, has a face value of $1,000, and pays an annual coupon of $70. The bond has 10 years remaining until maturity. Given this information, what is the cost of debt for XYZ Corporation?

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