WACC - Cost of Debt Flashcards by Ella Glasgow | Brainscape

Q

Kd =

A

Kd=Do(1+g)/Po +g

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Q

Assumptions of Kd?

A

Growth is constant, dividend paying company, all factors are known

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Q

Formula for redeemable debt

A

IRR

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Q

Formula for irredeemable debt

A

Kd = I(1-t)/Po

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Q

Formula for convertible debt

A

IRR

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Q

What is redemption?

A

Higher of shares and cash

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Q

Formula for bank loan

A

BL=I(1-t)

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