Page 60 - 5.2 i. Manac Finance ITC Summarised Notes
P. 60
COST OF CAPITAL
Debt (kd)
Convertible debt:
Step 3: Calculate the PV of the convertible debenture today
FV = 1 620 000
n = 5
i = 11.52% (16% x 72%)
Pmt = 100 000 x R10 x 12% x 72% = R86 400
COMP PV = 1 254 377
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