The standard range for a breakeven occupancy ratio among commercial properties tends to be somewhere between 60% and 80%. In contrast, breakeven occupancy ratios are usually on the lower end for hospitality properties, namely hotels, which average between 50% to 60%, which functions as a necessa...
For example, if your business paid $20,000 in interest last year and maintained an average debt load of $500,000. Your cost of debt would be: ($20,000/$500,000)*100 = 4% But this doesn’t tell the whole story. You need to factor taxes into the equation to determine the after-...
∑t=ss+nCFt(1+i)t+DROtwhere:CFt=Cash-flows available for debt service at year tt=The time period(year)s=The number of years expected to pay the debt backi=The weighted average cost of capital(WACC)expressed as an interest rateDR=Cash reserve available to repay the debt(the debt reser...
it also shows the actual cash flows that a firm generates from its operations. One can also use this ratio to compare it with the industry average and rivals. This would give a better idea of where the company actually stands. Also, this ratio comes very handily in the ...
1 BUSN3004 Corporate Finance – Formulae Sheet ()()()()()c c e i o o e i t D r t D r debt of benefits shiel d tax of lu e Present va Equity Debt Equity k Equity Debt Debt k k company the o f ue market val Total income operatin g Net E D O V O k...