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

Monthly cash flow, I need to prepare a monthly cash flow for a company with...

I need to prepare a monthly cash flow for a company with the given information, and need to comment on the current performance and the future sales increment. Then we need to find

Define the term- mergers and takeovers, Define the terms- Mergers and takeo...

Define the terms- Mergers and takeovers The terms takeovers and mergers are inter-related. When a company attains the majority of shares of another company, acquired company is

Definition of budgetary control, DEFINITION OF BUDGETARY CONTROL As pe...

DEFINITION OF BUDGETARY CONTROL As per the ICMA, BUDGETARY CONTROL is the establishment of budgets, relating the tasks of executives to the requirements of a policy, and the c

What do you mean by average cost and marginal cost, Q. What do you mean by ...

Q. What do you mean by Average Cost and Marginal cost? Average Cost and Marginal cost: the average cost is the combined cost as explain above, but for the difference in the for

Explain about money market mutual funds, Q. Explain about Money Market Mutu...

Q. Explain about Money Market Mutual Funds? Money Market Mutual Funds: Money market mutual funds (MMMFs) focus on short-term marketable securities such as TBs, CPs, CDs or call

Write a report to outlining the theoretical arguments, QUESTION The Man...

QUESTION The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some t

What do you understand by swap, Question 1 Swap is an agreement among t...

Question 1 Swap is an agreement among two or more parties to exchange sets of cash flows over a period in future and What do you understand by swap? Describe its features, kind

How to calculate rate of return?, Illustration Consider a Rs.1,00...

Illustration Consider a Rs.1,000 par value bond whose current market price is Rs.850. The bond carries a coupon rate of 8% and has a maturity period of 9 years. Wha

Describe the meaning of net income plus depreciation, The so-called "cash f...

The so-called "cash flow" (net income plus depreciation) is a flow of cash, but is it a flow to the shareholders or to the company? Suppose that net income plus depreciation is

Case let, Which type of financing is appropriate to each firm

Which type of financing is appropriate to each firm

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