Chapter 13 The Cost of Capital

The current market price of the loan stock is $90. What is the cost of the loan stock? Solution: 4.2.3 If interest on loan capital is paid other than annually, Cost of loan capital = Where n = number of times interest is paid per year. 4.2.4 Example 9. Henry has 12% irredeemable debentures in issue with a nominal value of $100. ................
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