Kapie

no wait the discount is 24.12%

and they are a strategic buyer

my brain hurts



Edited 1 time(s). Last edit at Friday, April 30, 2010 at 08:38AM by kurupt1.

liquidity

why zero-coupon bonds is of particular importance when analyzing capacity to repay for a high yield issuer???

WarrenB1

neilzuo Wrote:
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> why zero-coupon bonds is of particular importance
> when analyzing capacity to repay for a high yield
> issuer???

It is because over the life of the bond more liability accrues with PIK and zero-coupon securities. As this accrues and the increased liability is incorporated into the debt structure it will negatively affect the firms ability to repay senior debt.

Rasec

1.synergy so strategic merger
2.ebit +3m+100k=5.1m
3.24.11%

economicz

can someone show the calculation of the discount? thanks.

bbtomato

DLOC = control premium / (1 + control premium)
DLOC = .12 / 1.12 = 10.7%

Total discount = 1- (1 - DLOC)*(1 - DLOM)
= 1 - 0.893*.85
= 24.11%


Also, janakisri, i just bunged it into COGS as there was no other suitable place to put it