bond/loan issue question currently, direction, discount, question, choosing

edgeon

I am currently conducting an NPV analysis on whether to issue an amortizing loan or a bullet bond. However I am having trouble choosing a discount rates to use for the cashflows. Does curious if anyone could point me in the right direction.

Thanks

jacksparrow

The investor would use your cost of debt. And that would be a reasonable start for you too.

(When you say "rates" -- do you want to use a term structure rather than a single yield? that would be fine -- in which case you'll want to calculate your Kd by tenor, rather than using a single (say, 10y) value.)