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Also about Q1 2013 Dec. I understand that the disposal machine of 500 should be accounted as last year cash inflow, but the company dosen’t sell the land and building, why 80%*MP1250m is also included in last year cash inflow?
So in Alecto co, future p/s= tick value*tick number*number of contract
But in Phobos Co 12/08, future profit or loss=tick size*tick number*number of contract. This also the formular used in many othet questions.
Please explain 🙂
Sir,
Thank you for the explaination.
But about point 3, I think you misunderstood my question. Let me take a example.
Say the debt is 800, issue cost is 100, interest rate is 5% and tax rate is 30%. We have a period of 4 years.
When calculating tax shield, some question use 900*0.05*0.3 to get tax saving for every year of total 4 years and discount every year.
Other question just use 800*0.05*0.3 to calculate tax sheild and discount that 4 year cash flow and then calculate tax effect of issue cost separately and only discount it for 1 year.Personally I think the second treatment is right. Because issue cost only have one year effect on tax and the first treatment use issue cost for four years which doesnt make sense.
Can you explain that please?
Mr. Moffat
Example:
Now is 1st March, the company wants to borrow money from 1st June to 1st September
and it sells a three month June Future on 1st March.On 1st March, June future is 3.9, LIBOR is 3.5.
So when we calculate Basis,we get 3.9-3.5=0.4 on 1st March. But why we then devide 0.4 by 4 months instead of 3? The future is a three month future right? The answer says “This basis represents four months from begining of Dec to end of March”, I just don’t get it. I thought the future is from 1st March to 1st June with 3 months life.
And btw the loan is also 3-month length so I really don’t know where dose this 4 months come from.