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Sir sorry to be pain again
Wanted to know in part (a)
Why is market value of debt calculated different way like 5.6/1.0465,+5.6/1.0465^2 ——- =103.4%
ThanksI am not sure why you say ‘a different way’?
The market value of debt is always the present value of the future receipts discounted at the required return. I would have used annuity factors from the tables at 5% (because the tables do not have 4.65%) and the examiner accepts that, even though the answer doing that will be only approximate.
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