In finding a bond's value, the rate used to discount the bond's future cash flows is:
A) the bond's required return.
B) the firm's weighted average cost of capital.
C) the firm's after-tax cost of debt.
D) the bond's coupon rate

Question

Quizplus · Accepted Answer

The bond's required return, also known as the yield to maturity, is the rate used to discount the bond's future cash flows to determine its present value.

In Finding a Bond's Value, the Rate Used to Discount