IndigoLearn

Won't able to understand the equation

Sir I won't able to understand the calculation of yield to maturity method .. present value of cash inflow at 15 % for 5 years where present value is 10..


Sutapa Das

Sutapa Das

CA Inter

940

29-Apr-20 12:06

38

Answers (11)

Can you please paste the question as it is appearing in the book / material?


Sriram Somayajula

Sriram Somayajula

Admin

29-Apr-20 12:08

Problem no .4..

I won't able to understand the NPV calculations


Sutapa Das

Sutapa Das

CA Inter

940

29-Apr-20 12:15

I won't able to understand the NPV calculations

Do you mean Net Proceeds? calculation?


ruchi lahoti

ruchi lahoti

Moderator

29-Apr-20 15:49

Yea net proceeds valuation


Sutapa Das

Sutapa Das

CA Inter

940

29-Apr-20 15:59

Yea net proceeds valuation

In case a debt is an existing debt then the Net proceeds is taken as the Current Market Price and in case the debt is new, the the Net proceeds is taken as net proceeds from debentures In the present case the debt is an existing debt hence, you must take current market price for Net Proceeds


ruchi lahoti

ruchi lahoti

Moderator

29-Apr-20 16:11

In case a debt is an existing debt then the Net proceeds is taken as the Current Market Price and in case the debt is new, the the Net proceeds is taken as net proceeds from debentures In the present case the debt is an existing debt hence, you must take current market price for Net Proceeds

But sir told that in case of redeemable deb then we should take book value as net proceeds and in case of irredeemable deb if mp value is provided then we should take market value as net proceeds ... Am not about this. .. I won't able to understand the calculations ..okkkkk !


Sutapa Das

Sutapa Das

CA Inter

940

29-Apr-20 16:21

But sir told that in case of redeemable deb then we should take book value as net proceeds and in case of irredeemable deb if mp value is provided then we should take market value as net proceeds ... Am not about this. .. I won't able to understand the calculations ..okkkkk !

Sir, also told that, book value is the issue price. If the question is silent about issue price of debenture (i.e, whether they are issued at par, premium) then we must check for Market Price. If the Market Price is also missing, then we can take Face value as net proceeds. In this question the issue price is not given and also he Market value for debt is present. Hence we must take Market value


ruchi lahoti

ruchi lahoti

Moderator

29-Apr-20 16:36

Yes u r right ..but I won't able to understand the calculation for NPV in yield method refer to lecture no .6


Sutapa Das

Sutapa Das

CA Inter

940

29-Apr-20 16:39

You can understand it once you complete the time value of money chapter.


K K K

K K K

CA Inter

13K+

29-Apr-20 19:52

Yes u r right ..but I won't able to understand the calculation for NPV in yield method refer to lecture no .6

Please try to solve the problem, and come back if you are stuck at any point Send an image pointing out the specific point where you are facing problem


ruchi lahoti

ruchi lahoti

Moderator

30-Apr-20 13:33