(8 of 17) Ch.14 - Cost of debt: explanation & example

Cost of debt. (Debt is the same thing as loans, which include corporate bonds.) This is the annual cost to the Firm.
From the perspective of the investors who buy this Firm's bonds, "cost of debt" is nothing by "return on bonds" every year. This is also the same thing as "yield to maturity" on bonds, abbreviated as YTM.

[@lawxluffyduo]

A company plans to issue a 25-year bond with a 12.5% interest rate, issued at a face value of P1, 000.
The company is subject a 30% tax rate and expects a return on investment at 8%. Compute for the cost
of debt issuance.
It looks like the same but I can't seem to answer mine

[@Cey209]

Is there no other formula without using a financial calculator?

[@roelenmaeechalico6934]

hello can you show the formula? because i dont have financial calculator, only scifi. thank you

[@teachmefinance9453]

Actually, there is NO formula for this! Either "trial and error" or using the financial calculator.

[@sdot7977]

There is a equation. In matlab, it can expressed as 908.72 + 45*symsum((1+x)^(-k),k,1,50)+1000*(1+x)^(-50) == 0, where x is the Cost of Debt.

[@anira1504]

Добрый день, вы проводите частные уроки?

[@michaelg3941]

Cant believe I went through the whole video and theres no excel example..