Newhuman

FV=-1
I/Y=Int Rate/12
N=Time period in Months

Find PMT

That is the rate per month

Now that * 12 + the Int rate = Band of investment Mortgage rate

now do a WACC Calculation:
with % of equity investment and the above as the % of the Bond investment.

e.g. 20 year mortgage paying 6%, 35% debt financed, 65% equity financed at 12%

N=240, FV=-1, I/Y=6/12=0.5,
PMT=?

PMT=0.002164

PMT*12 = 0.02597 = 2.6%
total debt rate = 6+2.6 = 8.6%

0.35*8.6 + 0.65 * 12 = 10.8% --> Band of Investment rate.

CP