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finance mathematics

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  1. #1

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    finance mathematics

    If a company issues 2 bonds with different rates and maturity in 2012 how to calculate the avg capital cost in 2012 ?
    ( just for the bonds, not including other finance sources)

    e.g.
    US$ 1 million 4% 10 years
    and
    US$ 1 million 5% 30 years

    thanks a billion !

    Last edited by Morrison; 24-11-2012 at 12:22 PM.

  2. #2

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    Quote Originally Posted by Morrison:
    If a company issues 2 bonds with different rates and maturity in 2012 how to calculate the avg capital cost in 2012 ?
    ( just for the bonds, not including other finance sources)

    e.g.
    US$ 1 million 4% 10 years
    and
    US$ 1 million 5% 30 years

    thanks, a billion !

    Seems you already have the answer!

    Seems a tad optimistic though!

  3. #3

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    well, I just thought by the time I get a meaningful reply inflation has set in.
    Never watched Austin Powers ?


  4. #4

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    I doubt anyone will show up around here that is as smart as you to work it out, Morrison. Especially now that randy1 has been banned.


  5. #5

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    Are you looking for Discounted ROI?


  6. #6

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    no, sorry. it's about the company's financing cost.
    Whether they earn the money to serve the debt is something different.
    thanks, anyway.


  7. #7

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    Quote Originally Posted by Morrison:
    no, sorry. it's about the company's financing cost.
    Whether they earn the money to serve the debt is something different.
    thanks, anyway.
    OK, and you are not looking at the equivalent of managing the repayment of a mortgage?

  8. #8

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    well, at least you serve a function which is to keep my thread alive


  9. #9

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    Calculate cost of capital for each bond separately then weight based on value.

    http://www.zeepedia.com/read.php?ven...ance&b=22&c=19

    Morrison likes this.

  10. #10

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    Quote Originally Posted by Morrison:
    well, at least you serve a function which is to keep my thread alive
    Try to avoid the temptation of being supercilious.