Covenant Step-Up — Present Value of Incremental Coupons

The company issued a debt of R$1,000. The annual coupon for the first two years is 9.9% per year. However, starting from the third year, the coupon increases (step-up) by 1.8% per year, reaching a total of 11.7% in years 3 to 5. The discount rate for the cash flows is 8.1% per year.

Based on the coupon step-up from the third year, calculate the present value (R$) of the incremental coupons due to the step-up in years 3 to 5, discounted at the given rate of 9%.

The debt structure details are as follows: face value of R$1,000, base coupon rate of 9.9% per year, step-up of 1.8% in years 3 to 5, and a discount rate of 8.1% per year.

Compute the present value (R$) of the incremental coupons due to the step-up in years 3–5, discounted at the given rate.

PV of increment (R$):

✅ Increment per year: (R$ 18).
(PV = _{t=3}^{5} ) R$ 39.62.