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The cost of ccapital
4.4 RRedeemablle debt
Inveestor return (k d) cann be found by calculaating the IRRR of the
inveestment caash flows:
T 0 MVV (xx)
T 1 – n Inteerest paymments x x
T n Cappital repayyment x x
Cosst of debt (k d(1 – T)) to the commpany can be found using:
T 0 MVV (xx)
T 1 – n Inteerest paymments × (1 –– T) x x
T n Cappital repayyment xx
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