Bank Loan

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May 23, 2021 at 8:34 am #621489
Syed Ahsan Ali
Participant
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Can you please tell me how to calculate cost of debt of Non-tradeable debt such as Bank Loan.

Interest x (1 – tax)

Secondly, I wanted to know can we also use the cost of debt % of redeemable debt (using IRR) for Bank Loan?
May 23, 2021 at 11:04 am #621518
John Moffat
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The cost of a bank loan is as you have typed. The interest rate on the loan will be given in the question (most likely in the SOFP). We do not calculate the IRR.
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