Question 8.A.10: Tan and Co plc has irredeemable loan capital outstanding on ...

Financial Management for Decision Makers

Tan and Co plc has irredeemable loan capital outstanding on which it pays an annual rate of interest of 10 per cent. The current market value of the loan capital is £88 per £100 nominal value and the tax rate is 20 per cent. What is the cost of the loan capital to the business?

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