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  • Finance Through Debt

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    Ojas Gupta
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    This document outlines the financing of $125 million in debt over 15 years from 2012 to 2026. It shows that the company will take out $125 million in debt in 2012 and make annual interest payments of $8.125 million until 2026 when it will make a $125 million principal payment to pay off the remaining debt balance. The net present value of all the interest and principal payments over the financing period is calculated to be $98.3 million.

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    finance through debt

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    This document outlines the financing of $125 million in debt over 15 years from 2012 to 2026. It shows that the company will take out $125 million in debt in 2012 and make annual interest payments of $8.125 million until 2026 when it will make a $125 million principal payment to pay off the remaining debt balance. The net present value of all the interest and principal payments over the financing period is calculated to be $98.3 million.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    13 views1 page

    Finance Through Debt

    Uploaded by

    Ojas Gupta
    This document outlines the financing of $125 million in debt over 15 years from 2012 to 2026. It shows that the company will take out $125 million in debt in 2012 and make annual interest payments of $8.125 million until 2026 when it will make a $125 million principal payment to pay off the remaining debt balance. The net present value of all the interest and principal payments over the financing period is calculated to be $98.3 million.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    Financing through Debt (M$)

    Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
    Debt  125 125 125 125 125 125 125 125 125 125 125 125 125 125 0
    Principle 
    payment  0 0 0 0 0 0 0 0 0 0 0 0 0 0 125
    Interest 
    payment  8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125 8.125
    Debt 
    Outstanding 
    125 125 125 125 125 125 125 125 125 125 125 125 125 125 0

    Tax benefit  2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84 2.84
    Net interest 
    Paid  5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285
    Principle Paid 
    0 0 0 0 0 0 0 0 0 0 0 0 0 0 125
    Net 
    payments 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 5.285 130.285
    Present value 
    of payemnts
    $    98.30

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