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A company issued its 12% irredeemable loan notes at 95. Current market price is 92. Company pays corporation tax at a rate of 30%. What is current net cost of capital per annum of these loan notes?
Sir in this question please just tel me 1 thing that while calculating interest rate we should calculate it on 95 na (i.e 12% multiply by 95) instead of 100, as in this question the nominal value is 95.
It doesn’t matter what price they were issued at. The nominal value is always $100 unless the question says differently.
Unless you are attempting questions for which you do not have answers (which would be silly), then the answer to the question would surely make this clear!!
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