Sept/Dec question 1b part i

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May 28, 2017 at 2:49 pm #388605
Anonymous
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Hi,

When calculating the MVd for the first proposal, the answer says $120m (which I have assumed to be the non current liabilities amount) x 0.2 – is it 0.2 because 80% of the long term debt will have been paid off as per the question?

I’m a little confused where the 0.2 comes from.

Thanks

Emma
May 28, 2017 at 6:22 pm #388640
John Moffat
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In future please do say the year of the exam! I assume you are meaning the Sep/Dec 2016 hybrid paper 🙂

Yes – the 0.2 (or 20%) is because 80% of the debt will be paid off.
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