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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%

COMP PV = 1 254 377

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