Determine cost of redeemable debt, Financial Management

Assignment Help:

Q. Determine Cost of redeemable Debt?

Cost of redeemable Debt: - Usually a company issues a debt which is redeemable subsequent to a certain period during its life-time. Such a debt is named as Redeemable Debt. Cost of redeemable debt may as well be calculated before tax and after tax:

  • Cost of Redeemable Debt prior to tax :-

                                  I + 1/n (RV -NP)

          Kdb =  n / {1/2 x (RV +NP)}  X 100

Kdb = Cost of debt before tax

I = Annual Interest Charges

NP = Net Proceeds from the issue of Debt

n = Number of years in which debt is to be redeemed

RV = Redeemable Value of Debtredeemed.


Related Discussions:- Determine cost of redeemable debt

What do you mean by variable working capital, Q. What do you mean by Variab...

Q. What do you mean by Variable working capital? Permanent or fixed: Permanent or fixed working capital is the minimum amount which is required to ensure effective utilization

Which parameter better calculates value creation, Which parameter better ca...

Which parameter better calculates value creation; the EVA (Economic Value Added), the economic profit or the CVA (Cash Value Added)? The EVA (Economic Value Added) is the profi

Determine the proportion of debt and equity, Q. Determine the proportion of...

Q. Determine the proportion of debt and equity? Financing Decision: - This function is related to increasing of finance from different sources. For this reason the financial ma

Irr, #question how to collect real irr %..

#question how to collect real irr %..

Management of finacial institutions, what are the features of a comprehensi...

what are the features of a comprehensive interest rate risk management programme

Invitation of bids and bid publicity, I nvitation of bids and bid publicit...

I nvitation of bids and bid publicity In previous sub section we learnt how the bid capacity for works and goods are calculated. We discussed how to prepare the bid documents,

Aims of financial services authority, Aims of FSA The aim of FSA is to ...

Aims of FSA The aim of FSA is to promote efficient, orderly and fair markets, and to help retail consumers to get a fair deal. In fact, FSA has set out its aims under three bro

Financial management and materials department, Financial Management and Mat...

Financial Management and Materials Department The materials management is of utmost importance in a manufacturing firm and covers the areas such as procurement, storage, mainte

Define why it is difficult to forecast future exchange rates, Researchers f...

Researchers found that it is extremely difficult to forecast the future exchange rates more precisely than the forward exchange rate or the current spot exchange rate. How would yo

Discuss the pros and cons of financing in unhedged, You have the following ...

You have the following information about rates in London for Eurocurrency loans of one-year duration, the exchange rate between the USD and euros, the currency in which you want fi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd