MTR’s Cost of Debt Cost of debt can be looked as the required return on the debt instrument such as bond that is issued by an entity. Using net of tax formula The cost of debt is calculated by considering the March 29th 2012 bond issue by MTR Cost of debt = Rd (1-tc) Debt yield to maturity = 2.175% Hong King Tax rate = 16.5%
introduction The cost of capital is paramount to business expansion and meeting the investors’ expectation. The difference between the cost of capital and commercial returns determines the entity’s profitability. Given the importance of cost of capital in an organization, this study evaluates the MTR Company in light of its operation and expected operation in the … Read more