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What does the following mean? "$20,000 of 12% loan stock in ABC Co". What happened to the 88%?

0 Votes
November 13th 2015 AN ACCA USER 180 Points

2 Replies

+1 Vote

The $20,000 is the amount of loan obtained while 12% is capital cost or interest rate(per annum) on the loan. The 88% is of less significance.

November 13th 2015 AN ACCA USER 200 Points
0 Votes

It is the capital cost on loan stock.

November 15th 2015 AN ACCA USER 940 Points