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Hello Sir/ Ma’am
When we have to find the market value of a loan note in business valuation, do we always add the interest amount to get the cum-interest market value as our answer? And is it the same for finding the market value of a share—do we add the dividend to get the cum-dividend share price?
But when we have to find the cost of equity (Ke) or Kd, do we use the ex-dividend share price and the ex-interest market value?If the question specifies that interest is about to be paid, then you would calculate the cum-interest market value by adding the interest amount to the ex-interest market value.
If nothing is stated, you typically assume the market value is quoted as ex-interest.
Similarly, if the question indicates that a dividend is about to be paid, you would calculate the cum-dividend market value by adding the dividend to the ex-dividend market value.
Again, if the question does not specify, the market value is assumed to be ex-dividend.
Similarly, if the question indicates that a dividend is about to be paid, you would calculate the cum-dividend market value by adding the dividend to the ex-dividend market value.
Again, if the question does not specify, the market value is assumed to be ex-dividend.
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