13.1 Calculate Volume and Performance Variances

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. The market price is $95 ex interest. Calculate the cost of capital if interest is paid half-yearly. Solution: It interest is 12% annually, therefore 6% is payable half-yearly. ................
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