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HB CO has in issue 10% irredeemable loan notes, currently traded at 95% cum interest.
If the tax rate changes from 30% to 20 for the company, what will happen to the cost of irredeemable debt?My question to you is for the MV, why do u minus $95-$10???
The value is cum int.
Since the interest about to be paid is 10, the ex int value is 95 – 10 = 85 (and it is the ex interest value always that we need).I do suggest that you watch our free lectures – cum int / cum div and ex int / ex div are all explained in the lectures.
But there is no point in simply watching lectures at random!
Our lectures are a complete course for Paper F9 and are meant to be watched in order – they cover everything need to be able to pass the exam well.
You are using our website to ask questions, so why have you not been watching the lectures?? 🙂
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