Cost of debt

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

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November 25, 2014 at 2:52 pm #213141
stacie395
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Hi sir,

‘Ferlandis Plc raised $1,000,000 by the issue at par of 7% irredeemable loan stock, interest on which is payable yearly in arrears’.

If nothing is mentioned in the question, should we assume the 7% to be before or after tax…?

Thanks…~
November 26, 2014 at 9:09 am #213319
John Moffat
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The 7% (coupon rate) will always be before tax.
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