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Cost to company

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Cost to company

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • March 26, 2018 at 6:41 pm #443831
    humai
    Participant
    • Topics: 757
    • Replies: 248
    • ☆☆☆☆☆

    Sir, cost to company is Kd multiply by (1-t) na? and Kd is return to investors.

    March 26, 2018 at 7:18 pm #443839
    humai
    Participant
    • Topics: 757
    • Replies: 248
    • ☆☆☆☆☆

    2) Sir,in case of irredeemable debt if question says calculate cost of debt, then it is Kd or is it Kd(1-T)?
    3) In case of redeemable debt if question says calculate cost of debt, then it is IRR? and in WACC formula whole, for a redeemable debt, whole term Kd(1-T) will be replaced by IRR?

    March 27, 2018 at 7:50 am #443865
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54806
    • ☆☆☆☆☆

    Kd is the return to investors.

    For irredeemable debt, the cost of debt is Kd(1-t).

    For redeemable debt, the cost of debt is the IRR of the after-tax flows.

    Please do watch the free lectures – all of this is explained in detail in the lectures, with examples.

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Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘Cost to company’ is closed to new replies.

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