Evaluate cost of irredeemable debt subsequent to tax, Financial Management

Assignment Help:

Q. Evaluate Cost of Irredeemable Debt subsequent to tax?

Cost of Irredeemable Debt subsequent to tax: - When a company utilizes debt as a source of finance then it saves a considerable amount in payment of tax for the reason that the amount of interest paid on the debts is a deductible expense in computation of tax. Formula for computing cost of debt after tax is:

Kda = (-1/ NP) X 100 (1-t)

Kda = Cost of debt after tax

I = Annual Interest Charges

NP = Net Proceeds from the issue of Debt

t = Rate of Tax


Related Discussions:- Evaluate cost of irredeemable debt subsequent to tax

Board of directors, Q. Board of Directors Board of Directors - Individu...

Q. Board of Directors Board of Directors - Individuals responsible for overseeing the affairs of an entity including the election of its officers. Board of a CORPORATION which

Discount Pricing, Discount Pricing The T-bills are issued at a discount...

Discount Pricing The T-bills are issued at a discount to face value and hence have no coupon. Commission rates on round lots generally range from $12.50 to $25.00 per $1 mil

Describe the types of hazards that is found in z department, Z works for HS...

Z works for HS Company and has been asked to undertake an assessment of any health and safety issues that might be potential hazards in the department which she manages. Z's respon

Financial ratios, How can we interpret financial ratios??

How can we interpret financial ratios??

Relationship between bond price and time, Relationship between Bond Price a...

Relationship between Bond Price and Time   (If Interest Rates are Constant) The bond price changes as the bond moves closer to its maturity. If the bond is quoted

Weighted average cost of capital , I need report on Weighted Average Cost o...

I need report on Weighted Average Cost of Capital. Do you provide help in topic Weighted Average Cost of Capital? I need expert's assistance to solve my college assignment. Please

Concepts of cost of capital, Concepts of Cost of Capital 1. Explicit ...

Concepts of Cost of Capital 1. Explicit Cost And Implicit Cost The explicit cost of any source of finance may be described as the discount rate that equates the current v

Downgrade risk, Market participants' measure the default risk of an i...

Market participants' measure the default risk of an issue on the basis of the credit ratings that the credit rating agencies assign to the issues. Once rating is

Companies accuse investors of performing credit sales, At times, companies ...

At times, companies accuse investors of performing credit sales that they make their quotations fall. Is that true? It is true: there are companies that accuse investors who pe

Compare the ifrs and gaap revenue recognition policies, SUPERVALU INC . ...

SUPERVALU INC . , a large US retail grocer, had $36.1 billion in sales for its fiscal year ended February 25, 2011. SUPERVALU currently reports using US GAAP. The controller of

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