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Redemption value=bookvalue/Market value (based on what they given) Net proceeds = fv-dis-flo.cost Then why we written as reverse Rv=FV Np=mv Video Details ------------- Financial Management Cost of Capital #5. Illustration 3 (X Company Ltd. Part 1)
Answers (2)
Please note the corrections in your statements Redemption value = book value unlesss otherwise mentioned Net proceeds = IP - FC - Disc As there no mention in the question about the IP & as the MV is given, is it is clearly said that an assumption is made that the issue could have been made at the MP. Hence the above changes