Most accurate measure of the cost of companys debt

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Reference no: EM13974639

1. Suess Inc issues a 2-year corporate bond on 31 December, 2012 with a coupon rate of 7.6%, with a face value of $100 and interest paid semi-annually. Eighteen months later, the 2-year government bond has fallen to 1%, though the risk profile of Suess Inc remains that of a BBB-rated company, 2%. What would be the market price of the Suess Inc 2-year bond, 6 months prior to maturity? (Roundup to two decimal places)

Unit

Number

2. The most accurate measure of the cost of a company's debt is:

A. The company's interest expense.

B. The yield to maturity of the company's market traded debt.

C. The yield of an Australian government 10-year bond.

D. The coupon rate of the company's market traded debt.

Reference no: EM13974639

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