SOM1 please help me.........
tell me in layman language the concept of ex interest and cum interest ( I am asking in the paralance of redemption of debentures )
2 Replies
chandan ghosh
(none)
(196 Points)
Replied 16 February 2011
could you plz elaborate???
ex-int is excluding interest
and cum-int is including interest.
and if you want to know the whole concept . i mean int calculation and their entries then i have good text of
m. radhaswamy's book....it can clear you concept.
(Guest)
ex intrest :- the value of debentures does not inculde the intrest accured
cum intrest :- the value of debentures includ the intrest accured till date
in ex intrest u purchase debenture , with no intrest till date
in cum intrest u purchase debenture with a right on the intrest till date
for ex :- suppose a debenture of rs. 100, company declare intrest of rs. 10
u want to purchase the bebenture which is trading at rs.120 ex intrest
means u are purhcasing the debenture at rs. 120 whose face value is 100 and the intrest will be paid to seller of the debenture , u dnt have any right on rs.10 which company is going to pay
while now , if u purchase the debenture at rs. 120 cum intrest means
u purchase the debenture of rs . 100 face valuse , u will get rs.10 as intrest , here the seller is not having any right on the intrest of rs.10 , the buyer means u r having the right to get that rs. 10 as intrest
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