WHICH COST OF DEBT SHOULD BE USED IN FORECASTING CASH FLOWS?
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| Natura: | Artículo científico |
| Lingua: | en |
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Universidad ICESI
2009
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| author | IGNACIO VÉLEZ-PAREJA |
| author_facet | IGNACIO VÉLEZ-PAREJA |
| contents | WHICH COST OF DEBT SHOULD BE USED IN FORECASTING CASH FLOWS? IGNACIO VÉLEZ-PAREJA Administración y Contabilidad seasonality Cost of debt forecasting financial statements Frequently, analysts and teachers use the capitalized rate of interest for the cost of debt when forecasting and discounting cash flows. Others estimate the interest payments when forecasting annual financial statements or cash flows based on the average of debt calculated with the beginning and ending balance. Others use the end of year convention that calculates the yearly interest multiplying the beginning balance times its contractual cost. The use of one or other methods is critical for the definition of the tax savings. These approaches are illustrated with examples and the differences in using them. A simple proposal to solve the problem is presented. 2009 artículo científico 0123-5923 https://www.redalyc.org/articulo.oa?id=21211972004 en http://www.redalyc.org/revista.oa?id=212 Estudios Gerenciales application/pdf Universidad ICESI Estudios Gerenciales (Colombia) Num.111 Vol.25 |
| format | Artículo científico |
| id | redalyc_21211972004 |
| institution | Redalyc |
| language | en |
| publishDate | 2009 |
| publisher | Universidad ICESI |
| spellingShingle | WHICH COST OF DEBT SHOULD BE USED IN FORECASTING CASH FLOWS? IGNACIO VÉLEZ-PAREJA Administración y Contabilidad seasonality Cost of debt forecasting financial statements WHICH COST OF DEBT SHOULD BE USED IN FORECASTING CASH FLOWS? IGNACIO VÉLEZ-PAREJA Administración y Contabilidad seasonality Cost of debt forecasting financial statements Frequently, analysts and teachers use the capitalized rate of interest for the cost of debt when forecasting and discounting cash flows. Others estimate the interest payments when forecasting annual financial statements or cash flows based on the average of debt calculated with the beginning and ending balance. Others use the end of year convention that calculates the yearly interest multiplying the beginning balance times its contractual cost. The use of one or other methods is critical for the definition of the tax savings. These approaches are illustrated with examples and the differences in using them. A simple proposal to solve the problem is presented. 2009 artículo científico 0123-5923 https://www.redalyc.org/articulo.oa?id=21211972004 en http://www.redalyc.org/revista.oa?id=212 Estudios Gerenciales application/pdf Universidad ICESI Estudios Gerenciales (Colombia) Num.111 Vol.25 |
| title | WHICH COST OF DEBT SHOULD BE USED IN FORECASTING CASH FLOWS? |
| topic | Administración y Contabilidad seasonality Cost of debt forecasting financial statements |
| url | https://www.redalyc.org/articulo.oa?id=21211972004 |