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Marginal Cost of Debt
(Y(1-T))/ [1-(F(1-T)]
CAPM Formula
=Rf+B(Rpm)
Marginal Cost of PS
Dividend / Net Proceeds per share after floatation cost
Dividend = Dividend of BV
Net Proceeds after floatation cost = FMV PS x [1-(1-T)xF]
Marginal Cost of CS
[Rf + B x RPm]/ [1-f]
M&M F1
Vl= Vu + TD
Value of levered = Valued Unlevered plus Aftertax Debt
M&M Cost of Equity (Re) (F2)
= Ru + DE [Ru-Rd] x [1-T]
Ru= Cost of Unlevered
Rd = Cost of Levered
Effective Interest Rate on Trade Credit
[1+ Cash Discount / (Price less Discount)]^[365/Extra Days] -1
Value of a Right (Rights Offering)
[Rights on Share Price - Sub Price ]/ Number of rights required to buy one share +1