Loan notes that were originally issued at par are currently quoted in the capital market at 93

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Loan notes that were originally issued at par are currently quoted in the capital market at £93 per £100 nominal value. Repayment of the nominal value in full is due in exactly five years’ time. Interest at 10 per cent on the nominal value is due for payment at the end of each of the next five years. What is the cost of the loan notes?

Assume a 20 per cent rate of corporation tax.

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Business Finance

ISBN: 9781292134406

11th Edition

Authors: Eddie McLaney

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