Class Notes (835,342)
Canada (509,116)
York University (35,229)
ADMS 4540 (15)
Lecture 6

ADMS 4540 Lecture 6: formula1

1 Page
Unlock Document

Administrative Studies
ADMS 4540
William Lim

ODA semi-am Bond Dunration An Py og bond t-o Time PMT PV RV PPN/Price WV TM RV time par value te test PV Loan haute PM T m CHYTM) tota Last one TPMT Find Prat year 0, PA 17-M 2) YTM M n year o prsx Eond semi-annua N- Amor fx 2. FV. Semi-annua R v PV/Price WV face rTM par-value V of "Grade "flow: PMT loan RV-time toria Bond Price Change: Vo latili Rae x ini ial bond A bond price Price after Bond Price before Present Valve Loan Come Original coupon s h St State-new new P Ms Bond Refund CHt) x compon New 3) cost ofre funding Cov (ax X x premi old bond a Premium Flotation cost cm) cov (rs, xxrs) -t cov(rs, e'rb) Var Flot year h, tax shield. h. tax rate x PMTs h n :S yrs or amort over the life of issue YT FV of tax saving Net Stand devis 2 E Crs tax saving tion Additional Interest: Extra (old) Cov( P) bondx oldrate) m GSP fter tax Interest fic crti t on new invest new bond Rate Cnot Nenowt vers total addi tvun (1-tax) nterest total Invest dost 4) total savng d old x Coupon on ne. W issne nterest on hnte test on new newx new bond h)xCI-tax) x (V) old X were on new issue PV of ahinnal YXavi sold ago. H of year in Project, TT (a t t expected NPNo ZRR cost of CapitaLVI ect total investment cost vofc CATs to. Sk 1: Capital Cost K: discount rate tax shield d depreciationrate NPV nitial Pv of afte Project p fe r-tax Sav Evaluating cost-cutting Replace As NPV inital outlay PV of after-tax saving t old assets salvage Pv of old assets calvage gone +PN of new asset's salvage. Replacement New one cost old one ament price new k, salvage Net cCATS Pv of after tax benetiti P MATT tax). Profit it- discount rate, n. DV of cCA Tc shield. Netcapital 1. as: net salvage (Hdisaourt) PV of salvage Cold ent salvages new equipment salvage V of annul V Annuity due of growing CP v of an annnity) real rate prepetuity Po DI V ected Return r-g C constant growth tt Norina v Inflation or DIV P, P DJV DIVA DIVH
More Less

Related notes for ADMS 4540

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.