BI Co has in issue 8% irredeemable bonds quoted at 86% ex int.
The rate of corporation tax is 25%; personal tax is to be ignored.
What is the return to investors?
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FMrevision mock
10y ago#1You need to calculate the IRR of the flows.
Tax is irrelevant because it is investors who determine the market value.
I do suggest that you watch our free lectures - they are a complete course for Paper F9 and I cannot type them all out here :-)
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