An entity has some 10% bonds quoted at $95.00 ext int redeemable at par in five years' time. Corporation tax is paid at 31%. Calculate the entity's cost of debt.

I understand the calculations and the process to find the answer however I am not sure on how to decide which discount factors to use. In the example answer they use 6% and 10% however in other questions they use 5 and 10, 5 and 12....

for IRR the aim is to use a % that produces a negative NPV and one that produces a positive NPV, the advice is that they shouldn't be more than 5% apart.

So in the example question above the answer is given as below

Time Cash flow DF 6% Pres value DF 10% Pres value 0 -95 1 -95 1 -95 1-5 6.9 4.212 29.0628 3.791 26.1579 5 100 0.747 74.7 0.621 62.1 8.76-6.74

=6%+((10%-6%)*(8.76/(8.76+6.74))

8.260645161

However if you use 5% and 10% you get a different answer, and when answering to 2 decinmal places this will make the answer incorrect, especially in an OTQ.