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Sir there was a past exam question that
Phobis co has in issue 9% bonds which are redeemable at their par value of $100 in 5 years’ time . Alternatively each bond may be converted on that date into 20 ordinary shares of the company. The current ordinary share price of Phobis co is $4.45 and this is expected to grow at a rate of 6.5% per year for the foreseeable future. Phobis co has a cost of debt of 7% per year
Sir here cost of debt of 7% will assumed to be before tax cost of debt na or is it after tax?
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