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revision mock

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

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December 9, 2015 at 3:01 am #289398
kebeori
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- Topics: 5
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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?
December 9, 2015 at 8:42 am #289469
John Moffat
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- Topics: 57
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You 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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