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Convertible Bond

This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.

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December 1, 2014 at 4:12 pm #215221
msh24
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When do we use before-tax cost of debt and after-tax cost of debt when calculating current market value of a bond?
Thank you in advance.
December 1, 2014 at 8:16 pm #215462
John Moffat
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The market value is determined by the investors, and they are not affected by company tax. You always use the pre-tax cost when calculating the market value.
The free lectures on this will help you.
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