Hamilton Pawn Shop has two bond issues outstanding. Compute the weighted average cost of debt for HPS using the following data:
Bond Issue A Bond Issue B
Face Value 1000 1000
Current Price 97 104
Coupon rate 5% 7%
Payable Annually Semiannually
Years to maturity 14 6
Number of bonds outstanding 4000 2500
What is the YTM on bond A? _________________
What is the YTM on bond B? _________________
What is the market value weight (percentage) for bond A? ____________
What is the market value weight (percentage) for bond B? ____________
What is the weighted average cost of debt? ________________