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Explain the Cost of Redeemable Debentures and Preference Shares

Explain the Cost of Redeemable Debentures and Preference Shares

Answers

Redeemable fixed return securities have a definite maturity period. The cost of such securities is called yield to maturity (YTM) or redemption yield (RY). For a redeemable debenture Kd (cost of debt) = YTM = RY, can be determined using approximation method as follows:

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Wilfykil answered the question on August 5, 2019 at 06:15

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