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Nente(6/12) Variable rate loan

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Nente(6/12) Variable rate loan

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by AvatarJohn Moffat.
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  • December 8, 2016 at 12:39 pm #362219
    Avatarzulfi245
    Member
    • Topics: 65
    • Replies: 37
    • ☆☆

    To calculate value of equity : Value of company – value of debt(which was $6500)

    debt was variable rate loan which had a book value of $6500

    does that meanFOR Variable rate loans book value and market values will always be same?

    December 8, 2016 at 3:35 pm #362279
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54839
    • ☆☆☆☆☆

    If it is a straight loan, then it doesn’t have a market value – the value is the amount of the loan.

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