Why Avg-FM

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Hi  

 

Why avg of redeemable value and net proceeds is taken while calculating cost of redeemable debt.Please reply.

 

Replies (2)
Originally posted by :Amit Gupta
" Hi  

 

Why avg of redeemable value and net proceeds is taken while calculating cost of redeemable debt.Please reply.

 
"

usually the denominator is the market value and in the case of redeemable securities the market value is net proceed at the time of n issue and redeemable value is the estimate of the market value at the time of redemption. so we use the avg of both


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