Proteus Co (Dec 11)

1)-Proteus agrees to cancel its current loan to Tco , it confuses me , i was thinking the loan is paid by parent(proteus) and i didnt consider as loan when i was doing question , i thought it is just market value 0f 81m , do they mean M.V of debt ? 2)-The initial loan is 81M (market value) – 12M (from managers) – 4M (from venture capital) = 65M The managers are buying this company thats why the investment of 12 m is deducted from the loan , am i right ?? 3)-The interest is at 9%. So the first years interest is 9% x 65M = 5.85M They pay back 3M a year, so the amount owing at the start of the second year is 65 – 3 = 62M. while arriving at the calculation of debt/equity they are taking 62 rather than 65 , why not they are taking 65 (i.e start of loan) i feel so nervous while doing question of reconstruction and business evaluation , it just me or happens to others also , all of answers got wrong and i directly jump to an answer to try to undertsand the solution.