From a bond issuer's perspective, the IRR on a bond's cash flows is its cost to maturity; from the investor's perspective, the IRR on a bond's cash flows is the yield to maturity (YTM).

Question

Quizplus · Accepted Answer

This is correct. The bond issuer's perspective is focused on the cost of funding the bond until it matures, which is represented by the internal rate of return (IRR) on the bond's cash flows. The investor's perspective is focused on the yield they will receive on their investment until the bond matures, which is represented by the yield to maturity (YTM).

From a Bond Issuer's Perspective, the IRR on a Bond's